Humana (HUM) AI Stock Analysis

• Market Cap: $30.39B
• Dividend Yield: 1.41%
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.23
• Revenue Growth: 10.09%
• EPS Growth: -12.18%
• Country: US
• Employees: 65,680
• Sector: Healthcare
• Sector Strength: 53
• Industry: Medical - Healthcare Plans
• EPS (TTM): 11.58
• Shares Outstanding: 120,693,474
• 10 Day Avg. Volume: 1,711,524
• 30 Day Avg. Volume: 1,760,696
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 0.39
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $299.35
• Price Target Upside: 18.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

Humana's stock score reflects strong financial performance with robust revenue growth and profitability, though technical indicators present a neutral outlook. The valuation is moderate, and the earnings call highlights strategic achievements. External regulatory uncertainties pose challenges, but operational efficiencies provide stability.

Positive Factors

Earnings

HUM posted solid Q1 results with slight favorability in insurance MLR and reiterated 2025 guidance.

Medicare Advantage

The upgrade is based on an improving backdrop for Medicare Advantage (MA), with potential for margin expansion over the next two years due to flattening cost trends and an improving rate environment.

Operational Performance

EBITDA was 27.2% above the estimate, indicating strong operational performance.

Negative Factors

Cost Trends

There are risks such as the potential for MA cost trends to reaccelerate, which could limit margin expansion, and the possibility of losing the 2025 MA Stars lawsuit.

Medical Membership

Total medical membership decreased 7.2% year over year.

Star Ratings Lawsuit

The outcome of the Stars lawsuit presents binary optionality and is the next key catalyst.

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 exhibits strong financial performance with consistent revenue growth and robust profitability metrics. The balance sheet is stable with controlled leverage, though ROE has seen a slight decline. Cash flow generation is efficient, supporting ongoing operations despite mixed free cash flow growth.

Income Statement

Humana's income statement reflects strong profitability with a consistent increase in total revenue from 2020 to TTM 2025. The Gross Profit Margin remains robust at 100% due to the accounting classification. The Net Profit Margin for TTM stands at 1.42% and shows improvement over prior years despite some fluctuations. Revenue growth has been steady, with a notable 28.6% increase from 2022 to 2023. EBIT and EBITDA margins show resilience, though slightly varied, indicating operational efficiency. Overall, the income statement reflects a positive trajectory in revenue growth and profitability.

Balance Sheet

The balance sheet shows a solid equity base with Stockholders' Equity consistently growing. The Debt-to-Equity Ratio for TTM stands at 0.75, indicating a manageable level of leverage. The Equity Ratio is at 34.84%, reflecting a stable equity position relative to total assets. Return on Equity (ROE) for TTM is 9.63%, which is reasonable, though it has decreased compared to previous years. Overall, the balance sheet reflects financial stability with controlled leverage and a solid equity base, though ROE has seen a slight decline.

Cash Flow

Cash flow analysis indicates strong operational cash flow with an Operating Cash Flow to Net Income Ratio of 1.68 for TTM, suggesting efficient cash generation from operations. Free Cash Flow remains stable, showing slight growth with the Free Cash Flow to Net Income Ratio at 1.39. However, Free Cash Flow growth has been inconsistent, as seen in modest changes from 2022 to TTM. Overall, cash flow statements reflect healthy operational cash generation and sufficient free cash flow, though growth has been mixed.

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	106.37B	92.87B	83.06B	77.16B
	EBIT
2.56B	4.01B	3.80B	3.15B	4.99B
	EBITDA
3.53B	4.93B	4.64B	3.86B	5.60B
	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: 253.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 253.12 is below the 20-day moving average (MA) of 267.70, below the 50-day MA of 264.51, and below the 200-day MA of 287.30, indicating a bearish trend. The MACD of -3.89 indicates Positive momentum. The RSI at 42.08 is Neutral, neither overbought nor oversold. The STOCH value of 9.13 is Positive, 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	79 Outperform	$17.14B	15.27	26.72%	―	16.71%	12.23%
CNC	75 Outperform	$29.70B	8.89	12.59%	―	8.85%	33.30%
HLN	73 Outperform	$48.20B	26.34	8.90%	1.59%	2.16%	43.24%
HUM	69 Neutral	$30.39B	18.15	10.09%	1.41%	10.09%	-12.18%
ALNY	64 Neutral	$35.18B	―	-414.62%	―	17.21%	21.16%
VTRS	55 Neutral	$10.06B	―	-3.24%	5.66%	-4.58%	-1269.23%
Sector *	52 Neutral	$5.23B	3.70	-41.86%	2.84%	16.58%	-0.16%

Humana Corporate Events

Humana Reports Strong Q1 2025 Financial Results

Humana Inc. reported its financial results for the first quarter of 2025, noting a GAAP earnings per share (EPS) of $10.30 and an adjusted EPS of $11.58. The company affirmed its full-year 2025 adjusted EPS guidance of approximately $16.25, while revising its GAAP EPS guidance to approximately $14.68. Despite an anticipated decline in individual Medicare Advantage membership, Humana remains confident in its pricing strategy and long-term value creation. The company also highlighted progress in its CenterWell and Medicaid businesses, including a new contract in Illinois for a dual eligible special needs plan program.

Spark’s Take on HUM Stock

According to Spark, TipRanks’ AI Analyst, HUM is a Neutral.

Humana’s overall stock score reflects a mix of strengths and challenges. Strong revenue growth and strategic expansions bolster its market position, but declining profitability margins and increasing leverage present financial risks. Technical indicators provide a neutral outlook, while valuation is moderate. The earnings call highlights strategic achievements and operational challenges that balance out these factors. Continued focus on operational efficiency and managing costs will be crucial to improving its financial performance.

To see Spark’s full report on HUM stock, click here.

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.