CVS Health (NYSE:CVS) reported its fourth-quarter earnings results on Feb. 16. Although the healthcare giant ran into some headwinds with the COVID-19 pandemic, it still beat Wall Street earnings expectations. In this Motley Fool Live video, recorded on Feb. 17, Fool.com contributors Keith Speights and Brian Orelli discuss whether or not CVS Health is a stock worth buying after its Q4 update.

Keith Speights: On Tuesday of this week, CVS Health, ticker there is CVS, pharmacy giant, they reported the Q4 results. They said that their revenue in the fourth quarter was up 4% to $69.6 billion. Their GAAP earnings fell 44% to $975 million. Adjusted earnings per share dropped 25% to $1.30. However, that was still a little better than what Wall Street expected. Analysts were looking for a $1.24, and CVS Health is projecting full-year 2021 adjusted earnings per share of between $7.39 and $7.55.

Brian, what do you make of CVS Health's Q4 performance? Is this a stock that investors should consider buying right now?

Brian Orelli: Yeah. So retail and long-term care segment, their revenue was up there since this like a pharmacy. Their revenue was up, but so were costs because they have issues, they have COVID-19 related costs, and so that caused the operating income for that segment to drop.

Then it was sort of the same story with the healthcare benefits. That segment had been doing really well, since this is like their insurance segment. That segment had been doing really well. But people weren't going to see their doctor. So while they had some increase for COVID-19 related expenses, a lot of people were just not going to the doctor, and because they were continuing to accept premiums, profit on that segment hadn't been doing very well for the first three quarters of the year. In the fourth quarter, it slipped a little bit. I'm assuming that's because basically, people eventually [laughs] had to go to their doctor, and so the fourth quarter, they saw an uptick.

Then for the guidance, the 2020 adjusted earnings per share is supposed to be in the $7.50 range. The 2020 adjusted EPS for this year over last year was $7.50, and so comparing that to the guidance of $7.39 to $7.55, looks like it's going to be a decline to maybe a slight increase for earnings this year, and I think a lot of that is going to be those healthcare benefits segment because the insurance is going to have to pay for all the issues caused not going to their doctor this year.

Speights: Right. That's Aetna. CVS Health bought Aetna. Was it two years now? I guess, maybe? In the last couple of years or so, CVS Health bought Aetna, and of course, that's been a big pivot for them to expand their healthcare offerings.

Brian, the stock is, you might say, is dirt cheap right now. I'm pulling it up. Their forward price to earnings multiple is 9.8. That's pretty cheap, right?

Orelli: Yes. I mean, it just depends on the growth. It's not that cheap if earnings are declining and [laughs] continuing to decline. I guess it just depends on when you think that there's going to be a turnaround, and I think that 2021 is going to be challenging just because of the year-over-year comparison, especially in the insurance segment of the company.

Speights: I think you're right. I think we will know more about the prospects for CVS Health probably in 2022. I think that's when we'll see things maybe return more to normal for the company and we'll get a sense for how things really are going for them.

They face some challenging dynamics in the pharmacy area for sure. I mean, you've got Amazon.com, they've thrown their hat into the ring, and so I think we going to see things change quite a bit over the next several years. But CVS Health has done a pretty good job of adjusting to these changes over the last few years.

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