The Cigna Group (CI, Financial), a leading player in the healthcare plans industry, has seen a significant surge in its stock price over the past quarter. The company's market cap stands at $90.16 billion, with its stock price currently at $304.63. Over the past week, the stock has gained 3.66%, and over the past three months, it has seen an impressive 10.58% increase. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. Currently, the GF Value of CI is $312.21, indicating that the stock is fairly valued. This is consistent with the GF Valuation from three months ago, which also classified the stock as fairly valued.
Unpacking The Cigna Group's Business Model
The Cigna Group primarily provides pharmacy benefit management (PBM) and health insurance services. Its PBM services were significantly expanded by its 2018 merger with Express Scripts. These services are mostly sold to health insurance plans and employers. The company's largest PBM contract is with the Department of Defense, and it recently secured a deal with top-tier insurer Centene. In health insurance and other benefits, Cigna mostly serves employers through self-funding arrangements, but it also operates in government programs, such as Medicare Advantage. As of the end of June 2023, the company operates mostly in the U.S., with 18 million U.S. medical members covered. 
Profitability Analysis of The Cigna Group
The Cigna Group's Profitability Rank stands at 8/10, indicating a strong profitability position within its industry. The company's ROE (Return on Equity) is 14.74%, better than 63.16% of the companies in its industry. Its ROA (Return on Assets) is 4.50%, outperforming 66.67% of its industry peers. The company's ROIC (Return on Invested Capital), which measures how well a company generates cash flow relative to the capital it has invested in its business, is 7.17%, better than 52.63% of the companies in its industry. The Cigna Group has maintained profitability for the past 10 years, outperforming 92.86% of the companies in its industry.
Growth Prospects of The Cigna Group
The Cigna Group's Growth Rank is 9/10, indicating strong growth potential. The company's 3-Year Revenue Growth Rate per Share is 12.40%, better than 50% of the companies in its industry. Its 5-Year Revenue Growth Rate per Share is 30.00%, outperforming 92.86% of its industry peers. The company's future total revenue growth rate is estimated to be 8.72%, better than 63.64% of the companies in its industry. The 3-Year EPS without NRI Growth Rate is 16.60%, better than 81.25% of the companies in its industry. The 5-Year EPS without NRI Growth Rate is 19.30%, outperforming 80% of its industry peers. The future EPS Growth Rate is estimated to be 10.65%.
Major Holders of The Cigna Group's Stock
The top three holders of The Cigna Group's stock are Dodge & Cox, Larry Robbins (Trades, Portfolio), and Chris Davis (Trades, Portfolio). Dodge & Cox holds 12,025,406 shares, accounting for 4.06% of the total shares. Larry Robbins (Trades, Portfolio) holds 2,065,551 shares, accounting for 0.7% of the total shares. Chris Davis (Trades, Portfolio) holds 1,722,146 shares, accounting for 0.58% of the total shares.
Competitive Landscape
The Cigna Group faces competition from CVS Health Corp (CVS, Financial) with a market cap of $92.91 billion, Elevance Health Inc (ELV, Financial) with a market cap of $109.43 billion, and Humana Inc (HUM, Financial) with a market cap of $63.49 billion.
Conclusion
In conclusion, The Cigna Group's stock performance, profitability, and growth prospects are impressive. The company's strong profitability and growth ranks, coupled with its fair valuation, make it a compelling choice for investors. The company's significant market share and robust growth rates further enhance its investment appeal. However, investors should also consider the competitive landscape and the holdings of major investors when making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
