CorVel Corporation (CRVL): what the price requires
At today's price, CorVel Corporation (CRVL) is priced for +10.6% earnings growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/CRVL
Headline
| Field | Value |
|---|---|
| Ticker | CRVL |
| Company | CorVel Corporation |
| Current price | $62.94/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | fee-financial |
| Implied earnings growth | 10.6% |
| Price-to-earnings | 28.9x |
| Earnings yield | 3.5% |
Solve inputs: computed at a 8.8% cost of equity with 4% terminal growth over a 5-year stage, on the latest fiscal year's GAAP earnings base; each 1pp of cost of equity moves the implied earnings growth ~5.1pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.01σ |
| cohort percentile (of 49 peers) | 74 |
| sustained it ~5 years at this level | 52% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.72x | 3 | expensive |
| Earnings | 1.82x | 2 | expensive |
| Relative | 0.84x | 3 | justifies |
| Growth | 1.26x | 1 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $37.45 | 1.68x | yes | TBVPS $6.92 × 5.41x (ROE (TTM) 28.0% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption)) |
| Relative Valuation | Relative | $27.49 | 2.29x | yes | P/E 16.53x (blended: static sector reference 11x + trailing (TTM) 29x), scenarios: 13.8x / 16.5x / 19.3x (bear / base = reference held flat / bull), EV/EBITDA 22x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $23.13 | 2.72x | yes | BV/sh $7.64, ROE (TTM) 28.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $41.04 | 1.53x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $50.00 | 1.26x | yes | Rev $1.0B, growth 7% (input: historical growth; tapered), Terminal P/S: 2.8x / 3.4x / 4.0x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $74.90 | 0.84x | yes | EPS $2.14, growth 35% (input: historical EPS growth), PEG=0.84 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $19.18 | 3.28x | yes | √(22.5 × EPS $2.14 × BVPS $7.64) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $69.05 | 0.91x | yes | EPS $2.14 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $80.25 | 0.78x | yes | EPS $2.14 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $23.14 | 2.72x | yes | EPS $2.14 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $233.1m |
| Net debt / NOPAT (after-tax) | -2.22x (net cash) |
| Net debt / operating income (pre-tax) | -1.74x (net cash) |
| Share count CAGR (buyback) | -1.4% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- CorVel sells cost containment for workers' compensation and healthcare claims: it sits between the payer and the bill, using its CareMC platform and CERIS payment-integrity service to take cost out of claims, and it does this earning a return on equity around 28%.
- The defining number is the multiple: at roughly 27 times earnings the price assumes CorVel keeps compounding fee earnings near 9% a year, a pace it has delivered but that leaves little room for a stumble.
- What to watch is the CERIS healthcare engine and the post-founder transition: Gordon Clemons retired as chairman in late 2024 after 37 years, with CEO Michael Combs now leading the AI-driven, prepayment-first strategy.
Bull Case
Valuing CorVel means valuing a fee business, not an asset one. The company holds almost no inventory and carries no debt; what it owns is a technology platform, a provider network, and the claims expertise to take cost out of a workers' compensation or medical bill. So the right lens is the earnings the platform throws off and how reliably they grow, and on that measure CorVel is unusually good. It earns a return on equity around 28%, generates steady free cash flow, and has grown both revenue and earnings consistently: fiscal 2026 revenue rose 7% to $959 million and earnings per share rose 17% to $2.14. Earnings growing more than twice as fast as revenue is operating leverage, the sign of a business getting more profitable as it scales.
The moat is the integration of technology and clinical expertise into the claims workflow. CorVel's pitch to insurers and self-funded employers is that it captures cost they cannot capture themselves, and its own filings frame the strategy as capturing market share "with our cost containment services as national and regional insurance carriers and large, self-funded employers look for ways to achieve" savings. Once a payer routes its claims through CorVel's CareMC platform, switching means rebuilding integrations and retraining workflows, which is why last year's payer is almost always this year's payer, plus volume. The CERIS payment-integrity business, focused on catching billing errors before and after payment, is the faster-growing engine, riding a healthcare industry shift toward proactive cost management.
The capital discipline reinforces the quality. CorVel carries no debt, holds around $233 million of net cash, and has been quietly retiring shares. It does not chase acquisitions or dilute holders; it reinvests in its platform and buys back stock, the capital allocation of a company confident in its own returns. The post-founder transition to CEO Michael Combs has kept the strategy intact while pushing harder on AI-driven tools and the prepayment-first CERIS approach. The bull case is a high-return, debt-free, founder-built compounder with sticky customers and a faster-growing healthcare segment, the kind of quiet business that earns its premium by simply continuing to do what it does.
Bear Case
The bear case is whether CorVel's edge in cost containment is as durable as the multiple assumes, because the advantage it sells is exactly the kind that competitors and customers are both trying to replicate. CorVel competes against other managed-care companies and third-party administrators, and its own filings name the pressures directly: results depend on "the ability to expand certain areas of the Company's business; growth in the Company's sale of TPA services; shifts in customer deman[ds]" and competition "from other managed care companies and third party administrators." The risk is gradual erosion: as analytics tools commoditize and large insurers build their own bill-review and payment-integrity capabilities in-house, the unique value CorVel captures could thin, and a fee business whose fees compress does not grow into a 27-times multiple.
The technology arms race cuts both ways. CorVel leans on AI and its CareMC platform as differentiators, but every competitor is making the same investment, and the same AI that lowers CorVel's cost to process a claim also lowers the barrier for a rival or a customer to do it themselves. The CERIS prepayment-first strategy is promising, but it puts CorVel into payment-integrity, a field with well-capitalized specialists, so the growth engine the bull case prizes is also the most contested part of the market.
The valuation is where the bear gets its grip. The methods we use to triangulate say richly valued on everything except growth: the asset-value, earnings-power, and peer-multiple lenses all land below the price, and only the growth-based view reaches it. That is a durability premium, the market paying for compounding the static frames cannot see. State the requirement plainly: the price needs CorVel to keep growing fee earnings near 9% a year, and if competition or in-housing slows that to mid-single digits, the multiple compresses toward where the earnings-power and peer methods land, well below today's price. The balance sheet is pristine, net cash and no debt remove any solvency concern, so the risk is not financial. It is that a high multiple on a contested fee business leaves no margin for the growth to disappoint, and the post-founder era is an unproven stretch for a company that one person shaped for 37 years.
Valuation
CorVel is a fee financial, so it is worth the earnings it throws off, read through its price-to-earnings rather than its book value. At roughly 27 times earnings, a 3.7% earnings yield, the price implies the firm grows its fee earnings about 9.2% a year. Keep that approximate; it is one solve. The notable thing is that the implied pace is within what CorVel has actually delivered, but the multiple sits in the upper half of the fee-financial peer group, so the price is paying a premium for a track record rather than for an acceleration.
The methods we use to triangulate point to a single pattern: a durability premium. The asset-value methods, the earnings-power methods, and the peer-multiple comparison all say the price is rich, landing below today's level. Only the growth-based view reaches the price, and it gets there by crediting CorVel's compounding forward. That is the classic signature of a quality compounder: the static frames structurally cannot price durable, high-return growth, so they read as expensive, and the market pays up for the durability they miss. The spread between them is the premium, and the question it poses is whether the 28% return on equity and steady earnings growth persist long enough to earn it.
Solvency is a strength rather than a constraint. CorVel carries no debt, holds around $233 million of net cash, and generates consistent free cash flow, with a share count that has been gently declining. There is no leverage to amplify a downturn and no distress risk to bound. The downside is bounded instead by the resilience of a fee stream tied to claims volume, which is relatively steady through economic cycles since workers' compensation and medical claims do not vanish in a recession. What the price rests on is not the balance sheet but the durability of the moat: whether CorVel keeps capturing cost that payers cannot capture themselves, at the pace the premium multiple assumes.
Catalysts
The clearest catalyst is the CERIS healthcare growth engine. CorVel's payment-integrity business, focused on catching billing errors through its prepay and post-pay platform, is benefiting from the healthcare industry's shift toward proactive payment accuracy, and management describes the prepayment-first approach as accelerating revenue realization while holding strong margins. How fast CERIS scales is the swing factor for whether CorVel sustains the high-single-digit earnings growth the price assumes, since it is the faster-growing piece of the mix.
The technology and leadership story is the second thing to watch. CorVel is pushing its CareMC platform and AI-driven tools deeper into the claims workflow under CEO Michael Combs, who took the chairman role after founder Gordon Clemons retired in late 2024 following 37 years leading the company. The post-founder era is an execution test: keeping the disciplined, reinvest-and-compound culture intact while modernizing the platform. Evidence that the strategy and margins are holding through the transition is what validates the durability premium.
On the numbers, fiscal 2026 closed with revenue of $959 million up 7% and earnings per share of $2.14 up 17%, with fourth-quarter EPS up 20%. That continued operating leverage is the recent baseline. Analyst coverage is light and the consensus leans cautious at a Hold, reflecting the full valuation rather than any concern about the business. The company does not give detailed forward guidance, so the next earnings print, and specifically the trajectory of CERIS and the consolidated margin, is the cleanest read on whether the compounding is on track.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- ERIE (ERIE INDEMNITY COMPANY)
- FY2025 10-K: …services under a reciprocal insurance exchange structure. We do not directly compete against other such companies, given we are appointed by the subscribers at the Exchange to provide these services. The direct and affiliated assumed premiums written by the Exchange drive our management fee, which is our primary…
- FY2025 10-K: …as underwriting and service providers and are an integral part of the Exchange's success. Our results of operations are tied to the growth and financial condition of the Exchange. If any events occurred that impaired the Exchange's ability to grow or sustain its financial condition, including but not limited to…
- RYAN (RYAN SPECIALTY HOLDINGS, INC.)
- FY2025 10-K: …strength, and the ability to access certain insurance markets. We compete with a large number of national, regional, and local organizations. Additionally, the industry in which we operate is dynamic and creates opportunities for, and pressure from, our competitors and trading partners. For example, certain emerging…
- FY2025 10-K: …or growth thresholds, or insurance carriers increase their estimate of loss reserves (over which we have no 25 Table of Contents control), actual supplemental and contingent commissions we receive could be less than anticipated, which could adversely affect our business, financial condition, and results of…
- BWIN (The Baldwin Insurance Group, Inc.)
- FY2025 10-K: …throughout the year. Our revenues are generally highest in the first quarter due to a higher degree of first quarter policy commencements and renewals in certain IAS and MIS lines of business such as employee benefits, commercial and Medicare. In addition, a higher proportion of our first quarter revenue is derived…
- FY2025 10-K: …of a client. 23 We actively compete with numerous integrated financial services organizations as well as insurance company partners and brokers, producer groups, individual insurance agents, investment management firms, independent financial planners and broker-dealers. Competition may reduce the fees that we can…
- GSHD (GOOSEHEAD INSURANCE, INC.)
- FY2025 10-K: …growth lever for the business. Competition The insurance brokerage business is highly competitive, and numerous firms actively compete with us for customers and insurance markets. Competition in the insurance business is largely based upon innovation, knowledge, terms and conditions of coverage, quality of service,…
- FY2025 10-K: …Carriers and brokers, producer groups, individual insurance agents, investment management firms, independent financial planners, and broker-dealers. Competition may reduce the fees that we can obtain for services provided, which would have an adverse effect on revenue and margins. Many of our competitors have greater…
- ACT (Enact Holdings, Inc.)
- FY2025 10-K: …Price remains a leading competitive driver. We monitor various competitive, risk and economic factors while seeking to balance both profitability and market share considerations in developing our pricing strategies. We have and may again in the future reduce certain of our rates, which may reduce our premium yield…
- FY2025 10-K: …uncertain. Competitive environment. The U.S. private mortgage insurance industry is highly competitive. Our market share is influenced by the execution of our go to market strategy, including but not limited to, pricing competitiveness relative to our peers and our selective participation in forward commitment…
- HGTY (HAGERTY, INC.)
- FY2025 10-K: 087 $ 301,719 Percentage of earned premium 46.4 % 46.9 % Sales expense Sales expense was $165.9 million for the year ended December 31, 2025, an increase of $14.6 million, or 9.6%, compared to 2024. This increase was primarily driven by broker expense, which increased $7.9 million, or 11.7%, consistent with the…
- FY2025 10-K: …its earnings. Fluctuations in the operating results of our Insurance segment could be due to a number of other factors, many of which may be outside of our control, including competition, but also the frequency and severity of catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints,…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
CorVel leadership announcement, 2024 · CorVel FY2026 results · CRVL FY2025 10-K, accession 0000950170-25-076999 · CRVL solvency, latest filings · CorVel FY2026 commentary · analyst consensus, 2026