Elevance Health Inc. (NYSE:ELV) reported on Thursday third-quarter revenues of $44.7 billion, up 5.3% year-over-year, beating the consensus of $43.33 billion.

The increase was driven by higher premium yields in the Health Benefits segment and growth in CarelonRx product revenue, partially offset by membership attrition in the Medicaid business.

The benefit expense ratio was 89.5%, an increase of 270 basis points, driven primarily by the timing mismatch between Medicaid rates and the higher acuity of members.

The company forecasts an adjusted EPS of $33.00, down from the prior guidance of at least $37.20 and the consensus of $37.26.

Evolent Health, Inc (NYSE:EVH) stock is trading lower in reaction to Elevance Health's mixed earnings and softer guidance.

Large managed care organizations (MCOs) seem to be facing pressure regarding Medicaid utilization, while outdated data often determine the premiums they receive from states, William Blair noted.

This situation created a disparity between payments and trends in medical expenses following the completion of the redeterminations process. However, this issue is anticipated to be temporary as MCOs collaborate with state partners to recalibrate their pricing.

"Last, we believe Evolent's services remain a compelling value proposition given continued cost pressures facing health plans on Medicare Advantage and Medicaid lines, presenting a compelling growth setup for coming years," William Blair analyst wrote.

The analyst indicated Evolent's struggles were due to investors anticipating that rising medical costs would impact its at-risk performance suite.

ELV, EVH Price Actions: Elevance Health stock is down 12.12% at $436.64; Evolent Health stock is down 5.54% at $25.05 at publication Thursday.

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