Elevance Health Inc. (NYSE:ELV)

Goodwill

There is a consistent upward trend in goodwill, increasing from $21,691 million in 2020 to $28,277 million in 2024. This represents a cumulative increase of approximately 30%, indicating ongoing acquisitions or reassessment of asset values.

Customer relationships

Customer relationships have shown steady growth each year, rising from $5,180 million in 2020 to $7,866 million in 2024. The growth rate accelerates notably in the final year, suggesting increasing value from customer-related intangible assets.

Provider and hospital relationships

This category maintains a fairly stable value with minimal changes from $323 million in 2020 to $377 million in 2024. The slight increase in 2024 indicates a modest strengthening or acquisition of provider-based intangibles.

Other Intangibles

The ‘Other’ intangible assets exhibit significant volatility. The value rises sharply to $1,010 million in 2022, drops to $242 million in 2023, then rebounds to $423 million in 2024. This indicates possibly one-time adjustments or impairments during this period.

Intangible assets with finite lives, gross carrying amount

The gross carrying amount for intangible assets with finite lives generally increases from $5,947 million in 2020 to $8,666 million in 2024, with a dip in 2023. This suggests continued investment in finite-lived intangibles, tempered by occasional disposals or amortization.

Accumulated amortization

Accumulated amortization shows fluctuations, decreasing from -$4,057 million in 2020 to -$3,506 million in 2021, increasing again to -$4,279 million in 2022, followed by a slight decrease and a rise in 2024 to -$4,465 million. These variances suggest changes in amortization expenses or selective impairment/write-offs.

Intangible assets with finite lives, net carrying amount

The net carrying amount after amortization increases from $1,890 million in 2020 to a peak of $3,026 million in 2021, then declines slightly over the next two years before sharply rising to $4,201 million in 2024. This pattern suggests active management of amortization and asset additions.

Blue Cross and Blue Shield and other trademarks

This intangible asset remains constant at $6,299 million for the first two years, followed by a decrease to $5,991 million from 2022 onward, stabilizing thereafter. This likely reflects brand valuation adjustments or impairments sustained.

State Medicaid licenses

There is a steady increase in State Medicaid licenses from $1,216 million in 2020 to $1,902 million in 2024. The growth stabilizes between 2022 and 2023 before a notable increase in 2024, implying expansion or valuation increases within regulated licenses.

Intangible assets with indefinite lives

Intangibles with indefinite lives exhibit minor fluctuations, ranging from $7,515 million in 2020 to $7,893 million in 2024. The values remain relatively steady, reflecting stable long-term intangible asset valuations without amortization.

Other intangible assets

Other intangible assets rise consistently from $9,405 million in 2020 to $12,094 million in 2024, with a slight decline in 2022 and 2023. The general upward trend highlights continuous investment or revaluation of miscellaneous intangible assets.

Goodwill and other intangible assets (Total)

The total of goodwill and other intangible assets has increased steadily from $31,096 million in 2020 to $40,371 million in 2024. This overall growth demonstrates substantial accumulation of intangible assets over the period, indicating strategic asset acquisition and valuation growth.

Trends in Total Assets

The reported total assets demonstrate a consistent upward trend over the five-year period, increasing from 86,615 million US dollars in 2020 to 116,889 million US dollars in 2024. Similarly, the adjusted total assets, which account for the exclusion of goodwill, also increase steadily from 64,924 million US dollars in 2020 to 88,612 million US dollars in 2024. Although both measures show growth, the magnitude of increase is higher in reported total assets, indicating the presence and potential growth of intangible assets such as goodwill within the reporting periods.

Patterns in Shareholders’ Equity

Reported shareholders’ equity has increased steadily from 33,199 million US dollars in 2020 to 41,315 million US dollars in 2024. This indicates a strengthening of the company's net asset base as reported. However, the adjusted shareholders’ equity, which excludes goodwill, shows a more modest increase from 11,508 million in 2020 to 13,038 million in 2024. There is a slight dip in adjusted equity in 2024 compared to 2023, suggesting fluctuations or impairments related to goodwill adjustments or other intangible assets during this period. The significant difference between reported and adjusted equity underscores the considerable goodwill reported on the balance sheet.

Shareholders’ Net Income Evaluation

The reported shareholders’ net income exhibits an overall stable pattern with a notable increase from 4,572 million in 2020 to a peak of 6,104 million in 2021, followed by a slight decline and stabilization around 6,000 million in the subsequent years through 2024. The adjusted net income closely mirrors the reported figures, with a small difference appearing in 2024 where adjusted net income is marginally higher at 6,086 million compared to the reported 5,980 million, potentially reflecting adjustments related to non-cash goodwill impairments or similar accounting adjustments.

Overall Financial Insights

The continued growth in both reported and adjusted total assets, alongside the rising shareholders’ equity, suggests an expanding asset base and capital structure. The disparity between reported and adjusted figures highlights the impact of goodwill and intangible assets on the balance sheet, which significantly inflate reported book values relative to adjusted values. Net income remains relatively stable, indicating consistent profitability despite fluctuations in asset valuation and equity adjustments. The data suggest sound financial performance, with a cautious approach needed when considering asset quality and the effects of goodwill on the company’s financial position.

The financial data indicates several notable trends in profitability, efficiency, and leverage over the five-year period.

Net Profit Margin

The reported net profit margin experienced an increase from 3.78% in 2020 to a peak of 4.46% in 2021, followed by a gradual decline to 3.41% by 2024. The adjusted net profit margin displays a similar pattern, suggesting that goodwill adjustments have minimal impact on profit margin trends.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios increased steadily through the period, indicating improved efficiency in utilizing assets to generate revenue. The reported asset turnover rose from 1.39 in 2020 to 1.5 in 2024, while the adjusted ratio showed a higher base and growth, from 1.86 to 1.98 over the same timeframe.

Financial Leverage

Reported financial leverage showed modest growth, increasing from 2.61 in 2020 to 2.83 in 2024 with some fluctuation. Adjusted financial leverage was significantly higher throughout the period and exhibited more volatility, peaking at 6.8 in 2024 after a slight decline in 2023. This indicates a greater degree of leverage once goodwill adjustments are considered.

Return on Equity (ROE)

The reported ROE increased from 13.77% in 2020 to a peak of 16.93% in 2021, before gradually declining to 14.47% in 2024. The adjusted ROE, which accounts for goodwill, consistently remained substantially higher than the reported figures, reaching a high of 51.59% in 2021 and maintaining elevated levels above 40% afterward. This suggests enhanced shareholder returns when adjusted for the intangible assets.

Return on Assets (ROA)

The reported ROA rose from 5.28% in 2020 to a high of 6.26% in 2021, then declined to 5.12% in 2024. The adjusted ROA followed a similar trend but with higher values, peaking at 8.34% in 2021 and decreasing to 6.87% by 2024. These figures highlight better asset profitability after adjusting for goodwill.

In summary, the data reveals a general trend of improving asset utilization alongside stable but slightly declining profit margins and returns in the latter years. Adjustments for goodwill lead to higher leverage and stronger profitability metrics such as ROE and ROA, indicating the material impact of intangible assets on financial performance measurements. The year 2021 stands out as a peak performance period across most indicators before a moderate downturn ensued through 2024.

Reported Shareholders’ Net Income

The reported shareholders’ net income exhibited a significant increase from 2020 to 2021, rising from 4,572 million US dollars to 6,104 million US dollars. However, between 2021 and 2024, it demonstrated a slight declining trend, decreasing gradually to 6,025 million in 2022, 5,987 million in 2023, and 5,980 million in 2024.

Adjusted Shareholders’ Net Income

The adjusted shareholders’ net income mirrored the reported figures closely from 2020 to 2023. In 2024, a divergence is observed with the adjusted net income rising marginally to 6,086 million US dollars, compared to the reported figure of 5,980 million. This suggests some goodwill or non-recurring items positively impacted the adjusted earnings in 2024.

Reported Net Profit Margin

The reported net profit margin followed a similar trajectory to net incomes. It increased from 3.78% in 2020 to 4.46% in 2021, then declined steadily over the subsequent years to 3.87% in 2022, 3.52% in 2023, and 3.41% in 2024. This indicates a gradual reduction in profitability relative to revenue after 2021.

Adjusted Net Profit Margin

The adjusted net profit margin demonstrates trends consistent with the reported margin but shows a slight improvement in 2024, reaching 3.47% compared to the reported 3.41%. This reinforces the inference that adjustments led to better profit margins when excluding certain items, particularly in the most recent year.

Total Assets

The reported total assets show a consistent upward trend over the five-year period, increasing from 86,615 million US dollars in 2020 to 116,889 million US dollars in 2024. This reflects a steady growth in the asset base of the company. Similarly, the adjusted total assets, which exclude goodwill, also exhibit a continuous increase from 64,924 million US dollars in 2020 to 88,612 million US dollars in 2024. The adjustment results in significantly lower asset values, indicating a substantial portion of the assets is attributed to goodwill.

Total Asset Turnover Ratios

The reported total asset turnover ratio has improved from 1.39 in 2020 to a peak of 1.56 in 2023, followed by a slight decrease to 1.50 in 2024. This suggests improved efficiency in generating revenue from the asset base up to 2023, with a minor decline in the most recent year. In comparison, the adjusted total asset turnover ratios are consistently higher than the reported ratios, starting at 1.86 in 2020 and reaching 2.04 in 2023 before a slight decrease to 1.98 in 2024. This pattern indicates that the company generates more revenue per unit of asset when goodwill is excluded from total assets, highlighting the non-productive nature of goodwill in this context.

Overall Analysis

The continuous growth in both reported and adjusted total assets points to ongoing expansion or investment by the company. The increasing asset turnover ratios suggest improvements in utilizing the asset base to drive revenues, although the slight dip in 2024 warrants attention to understand potential operational or market factors. The difference between reported and adjusted figures underscores the impact of goodwill on financial metrics and the importance of considering both perspectives when assessing asset efficiency.

The analysis reveals distinct trends between the reported and goodwill adjusted financial metrics over the five-year period ending December 31, 2024.

Total Assets

Reported total assets demonstrate consistent growth, increasing from US$86,615 million in 2020 to US$116,889 million in 2024. This reflects an approximate 35% increase over the period. Adjusted total assets, which exclude goodwill, also show a steady upward trend, rising from US$64,924 million to US$88,612 million. The adjusted figures present a smaller base but similarly strong growth, increasing by about 36%.

Shareholders’ Equity

Reported shareholders’ equity increases from US$33,199 million in 2020 to US$41,315 million in 2024, marking a moderate growth trend with some variability. The adjusted shareholders’ equity, however, is significantly lower in absolute terms, starting at US$11,508 million and ending at US$13,038 million. This represents a smaller increase compared to the reported figure, with a less consistent upward pattern, including a slight decline observed in the final year.

Financial Leverage

Reported financial leverage ratios fluctuate slightly but maintain a generally stable range between 2.61 and 2.83 over the analyzed period. This indicates a consistent relationship between total assets and shareholders’ equity on a reported basis. In contrast, adjusted financial leverage ratios are substantially higher, ranging from 5.64 in 2020 to 6.80 in 2024, showing greater volatility and a pronounced peak in the final year. The elevated and more variable leverage ratios in the adjusted data suggest that goodwill exclusion materially affects the perceived leverage risk profile.

Overall, the data underscores solid asset growth and moderate increases in equity on both reported and adjusted bases. However, the adjusted figures highlight a notably higher leverage magnitude and volatility, signaling a more conservative financial position when goodwill is excluded. This distinction is essential for assessing the underlying financial health and risk exposure of the entity.

Shareholders’ Net Income

The reported shareholders’ net income exhibited a general upward trend from 4572 million US dollars in 2020 to a peak of 6104 million US dollars in 2021. This was followed by a slight decline in 2022 to 6025 million US dollars, remaining relatively stable around 5987 million and 5980 million in 2023 and 2024 respectively. The adjusted shareholders’ net income mirrored this pattern but showed a marginal increase in 2024, rising to 6086 million US dollars, suggesting minor adjustments had a positive impact on net income in the latest period.

Shareholders’ Equity

The reported shareholders’ equity increased steadily over the five-year period from 33199 million US dollars in 2020 to 41315 million US dollars in 2024. In contrast, the adjusted shareholders’ equity showed a more constrained growth, starting at 11508 million US dollars in 2020 and reaching 13038 million US dollars in 2024, with a noticeable increase in 2023 to 13989 million US dollars before declining slightly in 2024. This discrepancy between reported and adjusted figures indicates substantial goodwill or intangible asset deductions affecting the adjusted equity base.

Return on Equity (ROE)

The reported ROE showed a generally decreasing trend after peaking at 16.93% in 2021, followed by gradual declines to 14.47% in 2024. Conversely, the adjusted ROE, which accounts for equity adjustments, was significantly higher throughout the period, peaking sharply at 51.59% in 2021, then declining to 42.8% in 2023 before recovering to 46.68% in 2024. This indicates that when adjusting for goodwill and intangible assets, the company’s profitability relative to its adjusted equity remains strong but exhibits more volatility over time.

Overall Insights

The analysis reveals steady growth in reported equity and relatively stable net income in recent years. However, adjustments for goodwill and other intangibles substantially reduce the equity base, resulting in much higher adjusted ROE values compared to reported ROE. This suggests that core operational profitability on a net asset basis adjusted for non-tangible assets is robust but subject to greater variability. The decline in both net income and reported ROE post-2021 signals potential challenges in sustaining the peak profitability achieved in that year.

Net Income Trends

The reported shareholders’ net income increased significantly from 4572 million USD in 2020 to a peak of 6104 million USD in 2021. Subsequently, it exhibited a slight decline, stabilizing around 6000 million USD through 2022 to 2024. Adjusted net income follows a similar pattern but shows a slight increase in 2024 compared to the reported figure, reaching 6086 million USD, indicating some adjustments contributed positively to profitability that year.

Total Assets Evolution

The reported total assets steadily grew each year from 86615 million USD in 2020 to 116889 million USD in 2024. This reflects consistent asset growth over the period. Adjusted total assets, which exclude goodwill effects, also increased but at a lower absolute level, rising from 64924 million USD to 88612 million USD by 2024. The gap between reported and adjusted assets suggests significant goodwill or intangible asset components impacting the total asset values.

Return on Assets (ROA) Analysis

The reported ROA showed an initial increase from 5.28% in 2020 to 6.26% in 2021, followed by a gradual decline to 5.12% in 2024. This indicates that although asset base expansion continued, efficient profit generation relative to reported assets weakened slightly over time. In contrast, adjusted ROA, which is based on adjusted total assets, remained higher across all periods compared to the reported ROA, decreasing from 7.04% in 2020 to 6.87% in 2024. The consistently higher adjusted ROA suggests that excluding goodwill and related adjustments presents a more favorable view of operational efficiency.

Overall Insights

The data reveals a company experiencing steady growth in asset base and relatively stable profitability. The peak in net income in 2021 followed by stabilization indicates maturity or possible market saturation effects. The distinction between reported and adjusted figures provides insights into the impact of intangible assets on financial metrics, with adjusted measures showing stronger profitability and efficiency indicators. The declining trend in both reported and adjusted ROA towards 2024 may warrant attention to asset utilization and profit generation strategies going forward.