CVS Health Corporation (CVS) Hits Fresh High: Is There Still Room to Run?

Shares of CVS Health (CVS) have been strong performers lately, with the stock up 14.7% over the past month. The stock hit a new 52-week high of $106.15 in the previous session. CVS Health has gained 31.5% since the start of the year compared to the 1.4% gain for the Zacks Medical sector and the -1.8% return for the Zacks Medical Services industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 6, 2026, CVS Health reported EPS of $2.57 versus consensus estimate of $2.21 while it beat the consensus revenue estimate by 6.41%.For the current fiscal year, CVS Health is expected to post earnings of $7.44 per share on $409 in revenues. This represents a 10.22% change in EPS on a 1.72% change in revenues. For the next fiscal year, the company is expected to earn $8.37 per share on $425.13 in revenues. This represents a year-over-year change of 12.5% and 3.94%, respectively.Valuation MetricsWhile CVS Health has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.CVS Health has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 14X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.7X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 10X. Additionally, the stock has a PEG ratio of 1.02. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making CVS Health an interesting choice for value investors.Zacks RankWe also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, CVS Health currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CVS Health fits the bill. Thus, it seems as though CVS Health shares could still be poised for more gains ahead.How Does CVS Stack Up to the Competition?Shares of CVS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Concentra Group Holdings Parent, Inc. (CON). CON has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of C.Earnings were strong last quarter. Concentra Group Holdings Parent, Inc. beat our consensus estimate by 14.29%, and for the current fiscal year, CON is expected to post earnings of $1.53 per share on revenue of $2.33 billion.Shares of Concentra Group Holdings Parent, Inc. have gained 21.4% over the past month, and currently trade at a forward P/E of 19.72X and a P/CF of 15.12X.The Medical Services industry is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CVS and CON, even beyond their own solid fundamental situation.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks