CVS Health Corp. (CVS) 10-K Red Flags
Risk signals extracted deterministically from CVS Health Corp.’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (12)
- Leverage is building — debt rising while equity contracts: Long-term debt grew +185.7% while stockholders equity declined -0.5%. The debt-to-equity ratio is deteriorating, increasing financial risk and interest burden. This may constrain future borrowing capacity.
- Interest coverage deteriorating below 3x: Interest coverage fell from 3.72x to 1.75x. Operating income of $4.66B covers interest of $2.66B only 1.75x — approaching the threshold where debt service becomes constrained. Monitor for covenant breaches.
- Operating cash flow exceeds net income: OCF is 6.02x net income, indicating high earnings quality — cash conversion is strong and accruals are not inflating reported profits.
- Goodwill is 34% of total assets: Goodwill of $85.48B represents a large share of the balance sheet. If acquired businesses underperform, a non-cash impairment charge could materially impact earnings. Monitor segment performance and acquisition integration metrics.
- NEW: Off-balance sheet arrangements: Off-balance sheet arrangements appears in recent filings but not in the prior 24-month period. Monitor for materiality.
- Endogenous analysis: Both leverage and interest coverage are deteriorating simultaneously — debt is growing faster than operating income can support. This raises refinancing risk and may constrain strategic flexibility. Watch for covenant disclosures in subsequent 10-Q filings.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- 1 new risk-language term(s) detected in filing text: Off-balance sheet arrangements.
- Composite risk: Elevated.
- Leverage debt/equity 0.87 (moderate).
- Leverage is building — debt rising while equity contracts: Long-term debt grew +185.7% while stockholders equity declined -0.5%. The debt-to-equity ratio is deteriorating, increasing financial risk and interest burden. This may constrain future borrowing capacity.
- Interest coverage deteriorating below 3x: Interest coverage fell from 3.72x to 1.75x. Operating income of $4.66B covers interest of $2.66B only 1.75x — approaching the threshold where debt service becomes constrained. Monitor for covenant breaches.
Filings & ownership
- Latest annual report (10-K) filed Feb 10, 2026.
- Latest quarterly report (10-Q) filed Aug 5, 2026.
- 15 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 7 sell transactions — net selling $317.5M.
- ~10,000+ recent 13F-HR filings reference CVS Health Corp.; broad institutional reporting.
- Recent filers include Modern Wealth Management, LLC, Concorde Asset Management, LLC, Axiom Investment Management LLC.
- 15 recent 13G passive institutional ownership notices.
Full CVS analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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