WellPoint Reaches 52-Week High - Analyst Blog

On May 12, 2014, WellPoint Inc. WLP achieved a new 52-week high of $107.09 after posting first-quarter 2014 earnings results comprising an 8.5% positive earnings surprise. Notably, this healthcare services provider has delivered positive earnings surprises in all of the last four quarters with an average beat of 12.35%.

Following the company's earnings release on April 30, 2014, its share price rose almost 6.3%. The one-year return of the stock was 41%, much above the S&P 500's return of 16.1%.

During the first quarter, WellPoint's top line increased 1.2% year over year, backed on higher membership in the Medicaid, Commercial self-funded and FEB lines of business. The company also witnessed an increase in enrollment during the quarter, which will further drive revenues going forward.

In terms of financial strength, WellPoint seemed sound after the first quarter of 2014. Favorable timing of Individual enrollment and payments from various healthcare reform fees buoyed up the company's cash flow. WellPoint also continued to undertake capital deployment initiatives to enhance shareholders' value.

Additionally, the raised outlook for 2014 keeps us optimistic about the stock. The full-year 2014 Zacks Consensus Estimate increased 1.4% to $8.53 since the company reported its first quarter results, as most of the estimates moved north. During the same period, the estimates also pulled up the Zacks Consensus Estimate for full-year 2015 by 1.2% to $9.21 per share. The estimates translate to a year-over-year improvement of 0.16% and 7.91% for 2014 and 2015, respectively.

WellPoint currently caries a Zacks Rank #3 (Hold). Investors interested in the healthcare services industry may consider better-ranked stocks like Aetna Inc. AET, Centene Corp. CNC and Health Net, Inc. HNT. All of these have a Zacks Rank #2 (Buy).