This Healthcare Stock Is Absolutely Soaring - Here’s Why It’s Crushing the Market

Healthcare sector delivers another breakout performer as this stock rockets past analyst expectations.

Market Momentum

The stock's surge defies broader market trends, posting gains that leave traditional investments in the dust. While crypto markets flirt with new ATHs, this healthcare play demonstrates that real-world fundamentals still drive serious returns.

Industry Disruption

Innovative treatments and regulatory approvals fuel the rally—proof that biotech breakthroughs can outperform even the hottest crypto tokens when the science delivers. No blockchain promises here, just hard clinical data moving the needle.

Wall Street's Latest Darling

Analysts scramble to update price targets as institutional money floods in. Because nothing makes traditional finance move faster than missing out on easy gains—except maybe fearing they'll miss the next big thing while chasing yesterday's crypto pumps.

A health giant

So, what's a good way for an investor to take advantage of these trends and participate in that industry's relentless expansion? There are many ways, including investing in drug manufacturers, medical device makers, health insurers, and care providers, among other health-related companies.

One health company has operations that span many of those sectors. In fact, you might have visited one of its locations in the past month. It has around 9,600 stores across all 50 states plus the District of Columbia and Puerto Rico, and 85% of Americans live within 10 miles of one.

I'm talking about(CVS 0.43%). CVS is much more than a pharmacy chain. It provides healthcare services like lab tests, health screenings, vaccinations, and treatments for minor injuries at its in-store clinics. It employs more than 40,000 physicians, pharmacists, nurses, and nurse practitioners to enable those services.

It also owns health insurer Aetna, which it acquired in 2018. Covering 36 million people, it's the fifth-largest health insurer in the nation.

Oh, and the pharmacy part: CVS Health has a 27% share of pharmacy prescriptions nationwide.

Image source: Getty Images.

Strong results

Right now, CVS is firing on all cylinders. The company released its second-quarter results on July 31, and both earnings and revenue beat Wall Street's estimates. The company also increased its guidance for full-year earnings per share from a range of $6.00 to $6.20 to a range of $6.30 to $6.40. The report sent the stock sharply higher, and it climbed 18% in August.

Analysts now expect full-year earnings growth of 15% in 2025 and another 13% in 2026.

Yet the stock remains cheap, trading at just 10 times forward earnings estimates, which is lower than many of its healthcare industry peers.

CVS is also expanding. It's now swallowing up many former locations of competitor Rite Aid, which filed for bankruptcy protection in May,  and even better, acquiring Rite Aid's prescription files.

CVS has a market cap of about $90 billion, and the stock is up 65% year to date as of market close Sept. 10. Looking back further paints a different picture. The stock is down roughly 30% over the past three years.  But the company has been rewarding investors. Last year, the company repurchased about 40 million shares of stock and paid $3.3 billion in dividends.

Now on sale

So, CVS is doing well, and shares are on sale. They dipped a bit recently when CVS executives declined to give guidance about upcoming government ratings that will impact how much money the company gets from Medicare Advantage plans.

But that's not worrisome. CVS says it never gives guidance between quarterly earnings reports.

Savvy investors will take this opportunity to pick up a few shares of the expanding healthcare provider in light of the company's potential. There's plenty of upside with CVS.