Why Anthem Inc (NYSE: ANTM) Stock is Under Pressure

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Anthem Inc (NYSE: ANTM) stock fell over 0.9% on April 22nd, 2021 (as of 10:01:03 UTC-4 · USD; Source: Google finance) after the company post decent first quarter of FY 21.

The company has ended the quarter with medical membership totaling 43.5 million members, an increase of 3.3% year-over-year. During the period, Medicare Advantage membership grew by 197,000 lives, or 15% year-over-year.  At the end of March, 2021, the Company’s net unrealized gain position in the investment portfolio was $776 million, consisting primarily of fixed maturity securities. At the end of March, 2021 the cash and investments at the parent company totaled approximately $4.6 billion.

The company had reported the adjusted revenue growth of 9.4 percent to $32.39 billion in the first quarter of FY 21. The company posted first quarter operating revenue of $32.1 billion grew 9% over the prior-year quarter driven by higher premium revenue in Medicaid and Medicare, and growth in the pharmacy product revenue.

Additionally, during the first quarter of 2021, the Company repurchased 1.4 million shares of its common stock for $447 million, at a weighted average price of $316.06. At the end of March, 2021, the Company had approximately $5.6 billion remaining of share repurchase authorization. The company has declared a second quarter 2021 dividend to shareholders of $1.13 per share. The second quarter dividend will be paid on June 25, 2021 to shareholders of record at the close of business on June 10, 2021.

For fiscal 2021, the company expects adjusted net income is expected to be more than $25.10 per share, Medical membership is projected to be in the range of 44.1 – 44.7 million, Risk-based membership is projected to be in the range of 18.6 – 19.0 million and fee-based membership is projected to be in the range of 25.5 – 25.7 million. 2021 operating revenue is projected to be approximately $135.1 billion, including premium revenue of $114.5 billion – $115.5 billion, Benefit expense ratio is projected to be in the range of 88.0% plus or minus 50 basis points and SG&A ratio is projected to be 10.8% plus or minus 50 basis points. FY 21 operating cash flow is projected to be greater than $5.7 billion, investment income is now projected to be $970 million and interest expense is now projected to be $820 million.

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