CVS Health (CVS 0.50%) is a stock that's been struggling badly for multiple years and is coming off a brutal performance in 2024, when its shares nose-dived by 43%.

Investors may have gotten lured into its low, attractive valuation or bought it for its high-yielding dividend, only to end up disappointed later on. The healthcare company, despite its broad diversification, hasn't provided investors with much safety at all; if you had held the stock for the past three years, your investment would have lost more than half its value.

The company has recently made a change in management and is potentially looking at a myriad of options, including perhaps breaking up the business into smaller parts.

With all cards and possibilities seemingly on the table this year, could things finally turn around for CVS Health investors? Is this a good contrarian pick to take a chance on, or are investors better off staying away, given all the uncertainty?

A problematic few years for CVS have led it to where it is today

In October, CVS announced that it was replacing then-CEO Karen Lynch with David Joyner. Lynch took over in 2021 after Larry Melo announced his retirement. For CVS, it's been a tough three years to navigate, as rising medical expenses, the COVID pandemic, and staffing issues have all weighed on its operations.

The company hasn't been able to find much stability in its operations, and even now has struggled with forecasting. CVS has routinely missed expectations and has continued to lower its guidance on a regular basis. As a result, investors and analysts have lost confidence in the company and its ability to project its numbers.

That also makes it difficult to assess the company's value if there is a high degree of uncertainty in its future earnings. While the stock may appear cheap, trading at an estimated 7 times next year's profits (based on analyst expectations), if the company's bottom line comes in much worse than expected, then that multiple isn't terribly helpful in valuing the business.

Will 2025 be a transformative year for CVS?

Under a new CEO, there could be significant changes ahead for CVS, especially given the stock's poor results in recent years. And perhaps the biggest question mark is whether the business stays intact the way it is today, with health insurance, pharmacy benefits management, and pharmacy retail all under one umbrella. There were rumors last year that the company could be looking at splitting up its business, which could prove to be a tricky strategy, given how intertwined its operations are.

While spinoffs can sometimes allow businesses to focus on their core strengths and competencies, they could also undo synergies in the process and result in greater inefficiencies. But given the struggles the company has faced, I would be surprised if there weren't big moves on the horizon for CVS, as the business has been struggling with low margins, and it needs a way to drastically improve its bottom line. While it is a behemoth, generating around $369 billion in revenue over the trailing 12 months, just $5 billion of that has made it to the bottom line, for a lowly profit margin of 1.4%.

Amid such dreadful results for the business in 2024, investors should expect some significant shifts in strategy this year to help fix its operations. But what those changes will be is a big question mark.

Should you buy CVS Health stock?

CVS Health is a risky stock to own right now. The business has a cloud hanging over it, which is full of question marks. Given the recent change in leadership, investors may want to wait at least a couple of quarters and assess the new CEO's strategy before deciding whether the business is going in the right direction.

There are too many options on the table for CVS today for investors to make an informed decision about whether the stock may be in a better place in a few years. For now, investors should hold off on investing in the business, given the risk the healthcare stock possesses.