Stock Analysis on Net
Stock Analysis on Net

CVS Health Corp. (NYSE:CVS)

This company has been moved to the archive! The financial data has not been updated since May 1, 2025.

Common-Size Income Statement

CVS Health Corp., common-size consolidated income statement

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12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Products 62.46 68.74 70.46 70.03 71.18
Premiums 33.16 27.81 26.53 26.17 25.89
Services 4.38 3.45 3.01 3.80 2.93
Revenues from customers 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of products sold -55.65 -60.88 -61.22 -60.43 -61.21
Health care costs -31.06 -24.18 -22.16 -22.09 -20.78
Cost of revenues -86.71% -85.06% -83.38% -82.52% -81.99%
Gross profit 13.29% 14.94% 16.62% 17.48% 18.01%
Net investment income 0.58 0.32 0.26 0.41 0.30
Operating expenses -11.22 -11.17 -11.88 -12.74 -13.11
Restructuring charges -0.32 -0.14 0.00 0.00 0.00
Opioid litigation charges -0.03 0.00 -1.80 0.00 0.00
Loss on assets held for sale 0.00 -0.10 -0.79 0.00 0.00
Store impairments 0.00 0.00 0.00 -0.47 0.00
Goodwill impairment 0.00 0.00 0.00 -0.15 0.00
Operating income 2.30% 3.85% 2.41% 4.54% 5.19%
Interest expense -0.80 -0.75 -0.71 -0.86 -1.09
Gain (loss) on early extinguishment of debt 0.13 0.00 0.00 -0.16 -0.54
Other income 0.03 0.02 0.05 0.06 0.08
Income before income tax provision 1.66% 3.13% 1.75% 3.58% 3.65%
Income tax provision -0.42 -0.79 -0.45 -0.87 -0.96
Income from continuing operations 1.24% 2.35% 1.29% 2.71% 2.69%
Loss from discontinued operations, net of tax 0.00 0.00 0.00 0.00 0.00
Net income 1.24% 2.35% 1.29% 2.71% 2.68%
Net (income) loss attributable to noncontrolling interests 0.01 -0.01 0.00 0.00 0.00
Net income attributable to CVS Health 1.24% 2.34% 1.29% 2.72% 2.68%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

A comprehensive analysis of the common-size income statement reveals a significant structural shift in the revenue mix and a consistent erosion of overall profitability margins between 2020 and 2024. Net income attributable to the company has declined from 2.68% of revenues in 2020 to 1.24% in 2024, indicating a tightening of the bottom line over the five-year period.

Revenue Stream Composition
There is a marked transition in the company's revenue sources. Revenue from products, which represented 71.18% of total revenues in 2020, decreased to 62.46% by 2024. Conversely, premium-based revenue grew substantially, rising from 25.89% to 33.16% in the same period. Revenue from services also showed a modest upward trend, increasing from 2.93% to 4.38%. This suggests a strategic pivot toward insurance and healthcare services and away from traditional product sales.
Cost of Revenues and Gross Margin
The cost structure has evolved in alignment with the revenue shift. While the cost of products sold as a percentage of revenue decreased from 61.21% in 2020 to 55.65% in 2024, this was more than offset by a sharp increase in health care costs, which rose from 20.78% to 31.06%. Consequently, the total cost of revenues increased from 81.99% to 86.71%, leading to a steady decline in gross profit from 18.01% in 2020 to 13.29% in 2024.
Operating Performance and Expense Management
Operating expenses as a percentage of revenue have trended slightly downward, moving from 13.11% in 2020 to 11.22% in 2024, suggesting some successful operational efficiency gains. However, operating income has been volatile and generally downward, falling from 5.19% in 2020 to 2.30% in 2024. This decline is further exacerbated by non-recurring items, including opioid litigation charges that peaked at 1.80% of revenue in 2022 and increasing restructuring charges that reached 0.32% in 2024.
Net Profitability and Financial Obligations
Interest expenses have remained relatively stable, fluctuating between 0.71% and 1.09% of revenue. Income before income tax provisions followed the downward trend of operating income, dropping from 3.65% in 2020 to 1.66% in 2024. The final net income margin reflects this cumulative pressure, ending the period at 1.24%, which is less than half of the 2.68% margin recorded at the start of the analysis period.

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