Is Cigna Group a Long Term Opportunity After 5 Year 38.6% Share Price Gain?
- If you have been wondering whether Cigna Group is quietly turning into a genuine value opportunity, you are not alone, and the numbers give us plenty to dig into.
- The stock now trades at around $265.44, down 4.3% over the last week and 3.3% year to date, but still up 38.6% over five years, a pattern that hints at shifting sentiment around its long term prospects.
- Recent headlines have focused on Cigna's ongoing push to expand its healthcare services footprint and partnerships, alongside continued scrutiny of U.S. healthcare policy and reimbursement dynamics. Together, these themes help explain why the market has been rethinking both the growth runway and the risks attached to the business.
- On our framework, Cigna scores a full 6/6 valuation checks, suggesting it screens attractively across multiple methods. Next, we will break down those approaches while also pointing to an even better way to think about the stock's true value later in the article.
Approach 1: Cigna Group Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to their value in $ today.
For Cigna Group, the latest twelve month free cash flow is about $7.0 billion. Analysts and internal estimates project this to rise to roughly $11.2 billion by 2029, with further gradual increases over the following years as Simply Wall St extrapolates beyond the formal analyst window. These future free cash flows are discounted using a required rate of return to arrive at a present value of the equity.
On this basis, the DCF model calculates an intrinsic value of roughly $1,025 per share, implying that the stock trades at about a 74.1% discount to its estimated fair value. That indicates a substantial margin between the current market price and what the cash flow profile suggests the business is worth.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Cigna Group is undervalued by 74.1%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.
Approach 2: Cigna Group Price vs Earnings
For profitable companies like Cigna Group, the price to earnings ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current profits. In general, businesses with stronger growth prospects and lower perceived risk justify a higher PE ratio, while slower growing or riskier companies tend to trade on lower multiples.
Cigna currently trades on a PE of about 11.5x, which is well below both the broader Healthcare industry average of roughly 22.2x and a peer group average near 31.0x. Simply Wall St also calculates a proprietary Fair Ratio of around 28.6x, which reflects what Cigna's PE might reasonably be given its earnings growth outlook, profitability, size, sector, and specific risk profile.
This Fair Ratio is more informative than a simple comparison with peers or the industry, because it adjusts for Cigna's own fundamentals rather than assuming it should trade in line with averages. When set against that benchmark, Cigna's current 11.5x multiple sits far below the 28.6x Fair Ratio, which suggests the stock may be trading at a material discount on an earnings basis.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your Cigna Group Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple tool on Simply Wall St's Community page that lets you write the story behind your numbers by linking your view of a company to explicit assumptions about its future revenue, earnings, margins, and ultimately its fair value.
Instead of stopping at a DCF or PE multiple, a Narrative ties Cigna Group's business story, such as buybacks, specialty pharmacy growth, or regulatory risk, to a concrete financial forecast and then to a calculated fair value that you can compare with today’s share price to decide whether it looks like a buy, hold, or sell.
Because Narratives on Simply Wall St are updated dynamically as new earnings, news, or guidance arrive, your fair value estimate automatically evolves with the latest information. You can also see how other investors interpret the same data. For example, some may build a bullish Cigna Narrative around accelerating specialty pharmacy growth and higher future PE multiples, while others plug in slower revenue growth, margin pressure, and a lower multiple to arrive at a more cautious fair value closer to the bottom end of current analyst targets.
Do you think there's more to the story for Cigna Group? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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