Humana (HUM) AI Stock Analysis

• Market Cap: $30.39B
• Dividend Yield: 1.37%
• Average Volume (3M): 1.80M
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.32
• Revenue Growth: 9.88%
• EPS Growth: -7.25%
• Country: US
• Employees: 65,680
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Plans
• EPS (TTM): 6.27
• Shares Outstanding: 120,271,820
• 10 Day Avg. Volume: 2,522,399
• 30 Day Avg. Volume: 1,800,623
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 0.34
• Enterprise Value/Ebitda: 11.16
• 1Y Price Target: $299.26
• Price Target Upside: 15.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 70 Outperform
• Price Target: $291.00 ▲(12.65% Upside)

Humana's overall stock score is driven by strong earnings call results and solid financial performance. The raised EPS guidance and strategic growth initiatives are significant positives. However, technical indicators suggest weak momentum, and valuation metrics indicate a moderate valuation, balancing the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health and expansion.

Medicaid Expansion

Strategic growth in Medicaid enhances Humana's market position and diversifies revenue streams, providing a stable base for future growth.

EPS Guidance Increase

Raising EPS guidance reflects confidence in operational performance and strategic initiatives, indicating potential for sustained profitability.

Negative Factors

Declining ROE

A declining ROE suggests challenges in maximizing shareholder returns, which could impact investor confidence and long-term financial performance.

Home Health Rate Reduction

Potential rate reductions in home health could pressure margins, affecting profitability and operational sustainability in this segment.

Stars Litigation

Ongoing litigation introduces uncertainty and potential financial liabilities, which could distract management and affect strategic focus.

Humana Business Overview & Revenue Model

Company Description

Humana Inc., together with its subsidiaries, operates as a health and well-being company in the United States. It operates through three segments: Retail, Group and Specialty, and Healthcare Services. The company offers medical and supplemental benefit plans to individuals. It also has a contract with Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program; and contracts with various states to provide Medicaid, dual eligible, and long-term support services benefits. In addition, the company provides commercial fully insured medical and specialty health insurance benefits comprising dental, vision, and other supplemental health benefits; and administrative services only products to individuals and employer groups, as well as military services, such as TRICARE T2017 East Region contract. Further, it offers pharmacy solutions, provider services, and home solutions services, such as home health and other services to its health plan members, as well as to third parties. As of December 31, 2021, the company had approximately 17 million members in medical benefit plans, as well as approximately 5 million members in specialty products. Humana Inc. was founded in 1961 and is headquartered in Louisville, Kentucky.

How the Company Makes Money

Humana generates revenue primarily through premium payments received from its members for health insurance coverage. The company's key revenue streams include Medicare Advantage plans, which are funded by the federal government and provide comprehensive health services to eligible seniors. Additionally, Humana earns revenue from its Individual and Family plans, employer-sponsored group health plans, and Medicare prescription drug plans. The company also benefits from partnerships with healthcare providers and organizations, which help improve care management and reduce costs. These partnerships, along with its focus on value-based care, contribute to Humana's ability to optimize health outcomes and enhance its financial performance.

Humana Financial Statement Overview

Summary

Humana demonstrates strong revenue growth and effective cost management, evidenced by a high gross profit margin. The balance sheet is stable with moderate leverage, but declining ROE suggests challenges in maximizing shareholder returns. Cash flow generation is robust, though the recent decrease in operating cash flow warrants attention.

Income Statement

Humana's income statement shows a consistent revenue growth trend, with a TTM revenue growth rate of 2.37%. The company maintains a strong gross profit margin of 100%, indicating effective cost management. However, the net profit margin is relatively low at 1.28%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.69, indicating a balanced approach to leveraging. The return on equity (ROE) is 9.02%, which is decent but shows a decline from previous years. The equity ratio stands at 36.21%, suggesting a solid equity base relative to total assets.

Cash Flow

Cash flow analysis indicates a positive free cash flow growth rate of 2.44% in the TTM period. The operating cash flow to net income ratio is 0.17, and the free cash flow to net income ratio is 0.83, highlighting strong cash generation relative to net income. However, the operating cash flow has decreased compared to previous periods, which could be a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	123.11B	117.76B	106.37B	92.87B	83.06B	77.16B
Gross Profit	123.11B	117.76B	106.37B	92.87B	83.06B	77.16B
EBITDA	3.78B	3.35B	4.79B	4.81B	4.39B	5.50B
Net Income	1.58B	1.21B	2.49B	2.81B	2.93B	3.37B
Balance Sheet
Total Assets	50.36B	46.48B	47.06B	43.05B	44.36B	34.97B
Cash, Cash Equivalents and Short-Term Investments	21.71B	20.43B	21.32B	5.06B	3.39B	4.67B
Total Debt	12.59B	11.72B	11.66B	11.13B	12.49B	6.66B
Total Liabilities	32.06B	30.03B	30.75B	27.68B	28.25B	21.24B
Stockholders Equity	18.23B	16.38B	16.26B	15.31B	16.08B	13.73B
Cash Flow
Free Cash Flow	2.44B	2.39B	2.98B	3.47B	946.00M	4.67B
Operating Cash Flow	2.93B	2.97B	3.98B	4.59B	2.26B	5.64B
Investing Cash Flow	-875.00M	-2.95B	-3.49B	-1.01B	-6.56B	-3.06B
Financing Cash Flow	-3.52B	-2.49B	-856.00M	-1.91B	3.02B	-1.96B

Humana Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 258.32
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUM, the sentiment is Negative. The current price of 258.32 is below the 20-day moving average (MA) of 285.13, below the 50-day MA of 268.12, and below the 200-day MA of 260.05, indicating a bearish trend. The MACD of -5.05 indicates Positive momentum. The RSI at 36.44 is Neutral, neither overbought nor oversold. The STOCH value of 20.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HUM.

Humana Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOH	73 Outperform	9.86B	8.97	24.55%	―	16.12%	10.99%
CI	73 Outperform	77.04B	15.86	12.48%	2.05%	20.93%	43.98%
UNH	72 Outperform	309.11B	14.58	21.20%	2.53%	9.98%	52.31%
ELV	71 Outperform	71.58B	13.35	12.26%	2.13%	10.21%	-17.79%
HUM	70 Outperform	$30.39B	19.39	9.03%	1.37%	9.88%	-7.25%
CNC	70 Outperform	16.06B	8.08	7.49%	―	12.96%	-23.25%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Humana Corporate Events

Humana Reaffirms 2025 Earnings Guidance in September Meeting

In September 2025, Humana Inc.’s senior management will meet with investors and analysts to reaffirm its earnings guidance for the fiscal year ending December 31, 2025. The company projects approximately $13.77 in diluted earnings per share and $17.00 in adjusted earnings per share, consistent with previous guidance. Humana emphasizes the use of adjusted EPS as a comprehensive measure for evaluating its core operating performance, aiding in planning and decision-making.

Humana Lowers 2025 GAAP EPS Guidance

Humana Inc. reported its financial results for the second quarter of 2025, highlighting a GAAP earnings per share (EPS) of $4.51 and an adjusted EPS of $6.27. The company has revised its full-year 2025 guidance, lowering GAAP EPS expectations to approximately $13.77 while raising adjusted EPS guidance to approximately $17.00. Humana also increased its revenue guidance to at least $128 billion and adjusted its Medicare Advantage membership projections to a decline of up to 500,000 members, reflecting strategic exits from unprofitable plans. The company continues to expand its CenterWell operations and launched a new Medicaid contract in Virginia, indicating a focus on sustainable growth and value creation.