Elevance Health $ELV ( ▼ 7.31% ) topped Wall Street’s profit expectations for the latest quarter, but its guidance for next year disappointed investors already on edge about Medicare payment changes.
Solid quarter, softer revenue
For the final quarter of 2025, Elevance reported adjusted earnings of $3.33 per share, beating analyst forecasts. Revenue came in slightly below expectations at $49.3 billion, while its medical cost ratio landed right in line with estimates, showing costs remain elevated but stable for now.
The stronger profit print was not enough to fully offset concerns about what lies ahead.
Guidance points to a tough 2026
Elevance said it expects full-year 2026 adjusted earnings of at least $25.50 per share, well below the nearly $30 analysts had been projecting. Management described 2026 as a “trough” year, signaling that profitability may bottom before improving later on.
A big factor is Medicare Advantage. The company expects membership in those plans to fall sharply next year, adding pressure to revenue and margins.
Policy pressure is building
The weaker outlook comes as the federal government moves toward keeping Medicare reimbursement rates roughly flat, a headwind for insurers that rely heavily on those programs. At the same time, the industry continues to grapple with higher medical costs that surged over the past year.
For Elevance Health $ELV and its peers, the story is shifting from near-term earnings beats to how well they can navigate tighter government payments and still restore margins over the longer run.