Humana (HUM) AI Stock Analysis

• Market Cap: $31.70B
• Dividend Yield: 1.35%
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 26.3
• Beta (1Y): -0.11
• Revenue Growth: 10.70%
• EPS Growth: -49.85%
• Country: US
• Employees: 67,600
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical Service Plans
• EPS (TTM): 9.96
• Shares Outstanding: 120,644,740
• 10 Day Avg. Volume: 1,668,821
• 30 Day Avg. Volume: 1,812,038
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.27
• Price to Cash Flow (P/CF): -14.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $289.00
• Price Target Upside: 9.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

Humana's strong revenue growth and strategic market positioning are offset by declining profitability and increasing leverage. The stock's technical indicators reflect bearish sentiment, while valuation metrics suggest possible overvaluation. The earnings call and corporate events highlight both strategic advancements and operational challenges, creating a balanced outlook.

Positive Factors

Financial Performance

HUM reported a solid quarter with Q4:24 adjusted EPS beating consensus estimates.

Revenue

Q4:24 revenue of $29.2bn beat consensus estimates by +1.4%.

Negative Factors

Membership Loss

Medicare Advantage is expected to see -550k in membership losses in 2025, higher than originally expected.

Humana Business Overview & Revenue Model

Company Description

Humana Inc. is a leading American health insurance company headquartered in Louisville, Kentucky. The company primarily operates in the healthcare sector, providing a diverse range of health insurance products and services. Humana offers Medicare Advantage plans, Medicare prescription drug plans, and commercial health insurance, serving millions of members across the United States. With a focus on wellness and preventive care, Humana aims to deliver integrated and value-based health solutions to its members.

How the Company Makes Money

Humana makes money primarily through the sale of health insurance products and services. The company's revenue model is centered around its health plan offerings, including Medicare Advantage plans, which are a significant portion of its income. Humana also provides Medicare Part D (prescription drug) plans and commercial health insurance products. The company earns revenue through premiums paid by individual members and employers, as well as reimbursements from government programs like Medicare. Additionally, Humana benefits from strategic partnerships with healthcare providers and pharmacy benefit managers, which help manage costs and improve service delivery, contributing to its financial performance.

Humana Financial Statement Overview

Summary

Humana shows robust revenue growth but faces challenges with declining net profit and EBIT margins. The balance sheet is stable, however, increasing leverage raises concern. Cash flow management is weakening with negative free cash flow growth.

Income Statement

Humana's revenue has shown consistent growth over the years, with an impressive increase from $64.89 billion in 2019 to $117.76 billion in 2024. The gross profit margin is strong, indicating efficient cost management. However, net profit margins have decreased over the years, suggesting potential challenges in controlling non-operating costs or interest expenses. EBIT and EBITDA margins have also been declining, reflecting increasing operational costs relative to revenue.

Balance Sheet

The company maintains a moderate debt-to-equity ratio, indicating a balanced use of debt and equity for financing. However, the equity ratio has been decreasing, suggesting a growing reliance on debt financing. Return on equity has been declining, which could signal inefficiencies in generating profits from shareholders' equity. Overall, the balance sheet shows stability but raises concerns about increasing leverage.

Cash Flow

Operating cash flow has seen fluctuations, with a decline from previous years, which could affect the company’s ability to reinvest and finance operations effectively. Free cash flow growth is negative, indicating potential issues in generating cash after capital expenditures. The operating cash flow to net income ratio suggests a stable conversion of net income to cash, but the free cash flow to net income ratio indicates a decreasing trend.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
117.76B	106.37B	92.87B	83.06B	77.16B
	Gross Profit
117.76B	93.19B	80.20B	72.94B	67.10B
	EBIT
2.56B	4.01B	3.80B	3.75B	4.96B
	EBITDA
3.12B	4.93B	4.68B	4.34B	5.45B
	Net Income Common Stockholders
1.21B	2.49B	2.81B	2.93B	3.37B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
20.43B	21.32B	5.06B	3.39B	4.67B
	Total Assets
46.48B	47.06B	43.05B	44.36B	34.97B
	Total Debt
11.72B	11.66B	11.42B	12.82B	6.98B
	Net Debt
9.50B	6.96B	6.36B	9.43B	2.31B
	Total Liabilities
30.03B	30.75B	9.03B	10.54B	6.06B
	Stockholders Equity
16.38B	16.26B	15.31B	16.08B	13.73B
Cash Flow		Free Cash Flow
2.39B	2.98B	3.47B	946.00M	4.67B
	Operating Cash Flow
2.97B	3.98B	4.59B	2.26B	5.64B
	Investing Cash Flow
-2.95B	-3.49B	-1.01B	-6.56B	-3.06B
	Financing Cash Flow
-2.49B	-856.00M	-1.91B	3.02B	-1.96B

Humana Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 262.78
• 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 262.78 is below the 20-day moving average (MA) of 265.32, below the 50-day MA of 269.62, and below the 200-day MA of 309.53, indicating a bearish trend. The MACD of -4.18 indicates Negative momentum. The RSI at 46.68 is Neutral, neither overbought nor oversold. The STOCH value of 68.03 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
CNC	75 Outperform	$28.71B	9.26	12.51%	―	5.89%	27.09%
CI	69 Neutral	$85.25B	25.69	0.84%	1.80%	25.19%	―
HUM	67 Neutral	$31.70B	26.31	7.37%	1.35%	10.70%	-49.85%
UNH	65 Neutral	$434.13B	30.61	14.66%	1.75%	8.35%	-35.14%
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%

Humana Corporate Events

Humana Reaffirms 2025 Earnings Guidance to Investors

Between March 3, 2025, and March 31, 2025, Humana Inc.’s senior management will meet with investors and analysts to reaffirm their guidance for the fiscal year ending December 31, 2025. The company projects diluted earnings per common share of approximately $15.88 and adjusted earnings per common share of approximately $16.25. This reaffirmation aligns with previous guidance issued in February 2025 and highlights Humana’s use of Adjusted EPS as a tool for evaluating core business operations and decision-making. The announcement underscores Humana’s commitment to providing a comprehensive perspective on its financial performance, which could influence stakeholder confidence and market positioning.

Humana Reports Q4 2024 Net Loss Amid Strategy Shift

Humana Inc. reported a net loss for Q4 2024, with a GAAP net loss per share of $5.76 and an adjusted net loss per share of $2.16, but the company affirmed its guidance for 2025, expecting adjusted earnings per share to be at least in line with 2024 results. Despite a decline in individual Medicare Advantage membership due to exiting unprofitable plans, Humana continues to advance its Medicaid and CenterWell strategies, expected to enhance earnings in the long term.