Humana (HUM) AI Stock Analysis

• Market Cap: $21.60B
• Dividend Yield: 1.38%
• Average Volume (3M): 2.71M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.73
• Revenue Growth: 9.87%
• EPS Growth: -5.58%
• Country: US
• Employees: 65,680
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Plans
• EPS (TTM): -3.96
• Shares Outstanding: 120,595,970
• 10 Day Avg. Volume: 1,677,423
• 30 Day Avg. Volume: 2,709,583
• PEG Ratio: -18.57
• Price to Book (P/B): 1.75
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 82.27
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 0.23
• Enterprise Value/Gross Profit: 1.58
• Enterprise Value/Ebitda: 10.24
• 1Y Price Target: $215.00
• Price Target Upside: 20.01% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19
• EPS Forecast (FY): 9.59
• Revenue Forecast (FY): $158.21B

• Rating: 47 Neutral
• Price Target: $188.00 ▲(4.94% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is held back primarily by sharply weaker 2025 cash-flow conversion and margin compression, plus bearish technical momentum (price below key moving averages with negative MACD). A moderate valuation and dividend offer partial support, but the latest call’s guidance points to significant near-term EPS pressure from the STARS headwind even as membership growth and efficiency initiatives support a longer-term recovery outlook.

Positive Factors

Membership Growth & Retention

Sustained, sizable MA membership growth and a >500bp retention improvement expand the premium base and create lasting scale. Over 2–6 months this supports revenue stability, better negotiating leverage with providers, lower per-member acquisition costs, and a firmer runway for operating leverage as transformation benefits materialize.

Moderate Leverage & Capital Actions

A moderate leverage profile and explicit capital optimization (offsetting >$3B of capital requirements) give Humana financial flexibility to fund transformation, targeted M&A, and statutory requirements. This balance-sheet capacity reduces refinancing risk and supports multi-year strategy execution.

Transformation & Care-Platform Expansion

Planned efficiency initiatives (supplier consolidation, automation, outsourcing) plus expanding CenterWell clinics and Medicaid footprint create an integrated care platform. Over months this should improve medical margins through better care coordination, lower utilization, and higher lifetime value of members.

Negative Factors

Large STARS Funding Headwind

A structural ~$3.5B STARS headwind materially reduces expected government bonus payments and funding tied to quality scores. This directly depresses MA margins and earnings power over the next 2–6 months, forcing pricing, benefit, or provider support changes and complicating margin normalization timelines.

Weakened Cash Generation & Margin Compression

Sharp decline in cash conversion and compressed net margins reduce internal funding for investments and increase reliance on capital markets or asset sales. Over a multi-month horizon this constrains execution of transformation plans, limits buffer for regulatory shocks, and raises scrutiny on sustainable profitability.

Advance-Rate & Funding Uncertainty

Uncertainty from the advance-rate notice creates a material planning risk: final MA funding could require benefit redesign or pricing adjustments. This regulatory-driven variability undermines near-term margin visibility and forces conservative guidance and potential operational trade-offs in the coming months.

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 its health insurance premiums, which are collected from members enrolled in its various health plans, including Medicare Advantage, Medicare Prescription Drug Plans, and employer-sponsored commercial plans. The company's revenue model is based on risk adjustment payments from the Centers for Medicare & Medicaid Services (CMS) for its Medicare Advantage plans, which compensates Humana for providing services to members with varying health risk profiles. Additional revenue streams include fees for administering Medicaid plans and revenues from its pharmacy services division, where it manages pharmacy benefits for members. Significant partnerships with healthcare providers and the integration of technology to enhance patient care and streamline operations also contribute to Humana's earnings by improving efficiency and member satisfaction.

Humana Financial Statement Overview

Summary

Revenue growth has been steady over 2020–2025 and leverage looks moderate, but profitability has compressed sharply (net margin down to ~0.9% in 2025) and cash generation deteriorated materially in 2025 (free cash flow down ~76% YoY with weaker cash conversion).

Income Statement

Revenue has grown steadily from 2020 to 2025 (annual growth mostly high-single to mid-teens before slowing in 2025), showing durable top-line momentum. However, profitability has weakened meaningfully: net margin fell from ~4.4% (2020) to ~0.9% (2025), and operating profit levels are far below prior years (EBIT down sharply versus 2022–2023). Overall, the business is still profitable, but the earnings trajectory and margin compression are the key negatives.

Balance Sheet

Leverage is moderate: total debt of ~$12.4B against ~$17.7B equity in 2025, and the 2024 debt-to-equity level (~0.68) is reasonable for the industry. Assets and equity have grown over time, supporting balance-sheet stability. The main weakness is reduced profitability translating into weaker returns on shareholder capital (return on equity was solid in 2021–2024, but is not provided for 2025 and earnings have clearly compressed).

Cash Flow

Cash generation weakened materially in the most recent year: operating cash flow fell to ~$0.9B in 2025 from ~$3.0B in 2024, and free cash flow dropped to ~$0.4B (down ~76% year over year). Free cash flow also covered less than half of net income in 2025 (~41%), indicating weaker cash conversion versus prior years. While the company has produced strong cash flows historically, the sharp recent deterioration is a notable risk signal.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	129.66B	117.81B	106.44B	92.92B	83.65B
Gross Profit	18.85B	17.15B	18.05B	17.23B	14.45B
EBITDA	2.91B	3.25B	4.73B	4.81B	4.46B
Net Income	1.19B	1.21B	2.49B	2.81B	2.93B
Balance Sheet
Total Assets	48.91B	46.48B	47.06B	43.05B	44.36B
Cash, Cash Equivalents and Short-Term Investments	19.90B	2.22B	4.69B	5.06B	3.39B
Total Debt	12.37B	11.14B	10.21B	9.03B	10.54B
Total Liabilities	31.17B	30.03B	30.75B	27.68B	28.25B
Stockholders Equity	17.66B	16.38B	16.26B	15.31B	16.08B
Cash Flow
Free Cash Flow	375.00M	2.39B	2.98B	3.45B	920.00M
Operating Cash Flow	921.00M	2.97B	3.98B	4.59B	2.26B
Investing Cash Flow	2.27B	-2.95B	-3.49B	-1.01B	-6.56B
Financing Cash Flow	-1.22B	-2.49B	-856.00M	-1.91B	3.02B

Humana Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 179.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 179.15 is below the 20-day moving average (MA) of 183.83, below the 50-day MA of 223.00, and below the 200-day MA of 247.83, indicating a bearish trend. The MACD of -10.26 indicates Negative momentum. The RSI at 36.28 is Neutral, neither overbought nor oversold. The STOCH value of 41.30 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
CI	76 Outperform	$71.58B	12.29	14.40%	2.21%	16.75%	113.48%
ELV	64 Neutral	$63.92B	13.73	13.29%	1.99%	11.96%	-11.11%
UNH	63 Neutral	$260.03B	24.92	12.91%	2.69%	10.48%	24.25%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CNC	51 Neutral	$21.47B	-3.03	-28.79%	―	14.92%	-286.72%
MOH	49 Neutral	$7.44B	18.68	11.02%	―	13.71%	-18.02%
HUM	47 Neutral	$21.60B	25.97	6.98%	1.38%	9.87%	-5.58%

Humana Corporate Events

Humana Reaffirms 2026 Earnings Guidance in Investor Meetings

Between March 2 and March 31, 2026, Humana’s senior management planned to meet with investors and analysts to discuss the company’s outlook for the year ending December 31, 2026. During these meetings, the company said it would reaffirm its full-year 2026 guidance of at least $8.89 in diluted earnings per share and at least $9.00 in adjusted earnings per share, in line with guidance issued on February 11, 2026.

Humana highlighted its use of adjusted, non-GAAP EPS as a key tool for evaluating core operating performance over time, planning, decision-making, and incentive compensation, while cautioning that this metric has limitations and differs from GAAP. The company noted that while it does not expect changes to its adjusted EPS outlook for 2026, GAAP EPS guidance could change as a result of ongoing value creation and other strategic initiatives, a distinction that may influence how investors assess the quality and sustainability of its earnings.

The most recent analyst rating on (HUM) stock is a Buy with a $235.00 price target. To see the full list of analyst forecasts on Humana stock, see the HUM Stock Forecast page.

Humana Issues 2026 Guidance Amid Medicare Advantage Headwinds

Humana reported that for the fourth quarter of 2025 it posted a GAAP net loss per share of $6.61 and an adjusted net loss per share of $3.96, while full-year 2025 GAAP EPS came in at $9.84 and adjusted EPS at $17.14, broadly in line with management expectations. The insurer’s 2025 Insurance segment GAAP benefit ratio was 90.4%, slightly better than its guided top-end range, and the company highlighted strong growth in its CenterWell Senior Primary Care business, adding more than 100,000 patients during 2025 including those from The Villages Health acquisition, as well as an expanded Medicaid footprint now spanning 13 states with Georgia and Texas expected to launch in 2027.

On February 11, 2026, Humana issued full-year 2026 guidance of at least $8.89 in GAAP EPS and at least $9.00 on an adjusted basis, signaling a year-over-year earnings decline driven by Star Ratings headwinds for the 2026 bonus year despite mitigation efforts. Management also projected approximately 25% growth in individual Medicare Advantage membership in 2026, driven by new sales and improved retention linked to its consumer-led benefit and service strategy, underscoring a continued strategic shift toward government programs and senior-focused care platforms that could reinforce the company’s long-term positioning despite near-term pressure on profitability.

The most recent analyst rating on (HUM) stock is a Hold with a $260.00 price target. To see the full list of analyst forecasts on Humana stock, see the HUM Stock Forecast page.

Humana Announces Leadership Changes Effective January 2026

On December 16, 2025, Humana announced the retirement of George Renaudin, Insurance Segment President, by Q3 2026 after a 29-year career. Aaron Martin will join as President of Medicare Advantage in January 2026 and succeed Renaudin as Insurance Segment President. John Barger will become President of Medicare Advantage. These leadership changes aim to strengthen Humana’s operations and continue its focus on value-based care and shareholder value creation.

The most recent analyst rating on (HUM) stock is a Hold with a $282.00 price target. To see the full list of analyst forecasts on Humana stock, see the HUM Stock Forecast page.