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Humana
(NYSE:HUM)
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Rating:65Neutral
Price Target:
$466.00
▲(19.58% Upside)
Action:Reiterated
Date:10/13/26
The score is anchored by pressured fundamentals—meaningful profitability and ROE compression despite solid revenue growth and acceptable leverage. Technicals are a notable positive with strong trend and supportive momentum. Valuation is a key headwind (high P/E with a low yield). The latest earnings call adds support via cost-reduction execution and Stars operational progress, but elevated drug trend, plan-exit disruption, and policy/reserve uncertainty keep risk elevated.
Positive Factors
CenterWell capital flexibility
The new joint venture provides additional growth capital for CenterWell while keeping Humana responsible for clinic operations. Removing prior put arrangements should reduce balance-sheet liabilities and lower funding costs, improving financial flexibility for expansion and strategic investment.
Negative Factors
Compressed profitability
The sharp decline in net and operating margins shows that revenue growth is currently translating into relatively little earnings. Lower profitability reduces internal reinvestment capacity, weakens returns to shareholders, and leaves less cushion against medical-cost or policy pressures.
Read all positive and negative factors
Positive Factors
Negative Factors
CenterWell capital flexibility
The new joint venture provides additional growth capital for CenterWell while keeping Humana responsible for clinic operations. Removing prior put arrangements should reduce balance-sheet liabilities and lower funding costs, improving financial flexibility for expansion and strategic investment.
Read all positive factors
Humana Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales figures for each business unit, indicating which areas are contributing most to growth and where there might be potential for expansion or risk.
Breaks down sales figures for each business unit, indicating which areas are contributing most to growth and where there might be potential for expansion or risk.
Data provided by:
The Fly
The FlyHumana (HUM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$49.61B
Dividend Yield0.86%
Average Volume (3M)1.35M
Price to Earnings (P/E)38.8
Beta (1Y)1.03
Revenue Growth18.33%
EPS Growth-18.53%
CountryUS
Employees67,060
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)10.65
Shares Outstanding120,080,310
10 Day Avg. Volume2,015,939
30 Day Avg. Volume1,346,592
Financial Highlights & Ratios
PEG Ratio-18.55
Price to Book (P/B)1.75
Price to Sales (P/S)0.24
P/FCF Ratio82.27
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue0.43
Enterprise Value/Gross Profit3.14
Enterprise Value/Ebitda20.15
Forecast
1Y Price Target
$458.86Price Target Upside17.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)9.16
Revenue Forecast (FY)$162.52B
Humana Business Overview & Revenue Model
Company Description
Humana Inc., a prominent health and well-being enterprise, operates across the United States through its various subsidiary companies. Its operational structure is divided into three main segments: Retail, Group and Specialty, and Healthcare Servi...
How the Company Makes Money
Humana primarily makes money by collecting premiums and other payments tied to health plan membership, then managing the cost of members’ medical and pharmacy claims relative to those revenues.
1) Insurance premiums and membership-based payments
...
Humana Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 06, 2026
Earnings Call Sentiment Positive
The call conveyed a generally constructive operational and strategic progress narrative: clear cost-reduction execution (120 bps Y/Y improvement in Q2 operating cost ratio and expected ~150 bps full-year), tangible improvement in key Stars-related measures (outperforming historical CAGR on most selected metrics and ~5% better quality improvement rate for BY '29 measures), balance-sheet moves (Gentiva divestiture ~ $900M and $1.5B P-Cap facilities) and a new statewide Medicaid win. However, material risks remain — notably elevated and rising drug trend, dependence on membership mix for margin realization, plan-exit disruption (~600k members), elevated reserves/IBNR, and Stars/ policy uncertainty — which temper the outlook. On balance, the highlights (execution, cost savings, Stars operational progress, capital actions) outweigh the lowlights (policy uncertainty, drug trend, membership disruption), producing a cautiously positive sentiment.Positive Updates
On-Track to 2028 Margin Goal
Management reiterated they are tracking to expectations for 2026 and expect 2027 MA bids to drive progress toward a sustainable pretax margin of at least 3% in 2028; they expect meaningful margin expansion in 2027 though final results will depend on membership size and composition.
Negative Updates
Stars Outcome Uncertainty and Litigation Risk
While operational improvements are strong, outcomes remain uncertain because CMS thresholds are unknown until final release; management also noted ongoing litigation and policy uncertainty around the MA Stars program which could affect future incentives and competitive positioning.
Read all updates
Q2-2026 Updates
Positive
Negative
On-Track to 2028 Margin Goal
Management reiterated they are tracking to expectations for 2026 and expect 2027 MA bids to drive progress toward a sustainable pretax margin of at least 3% in 2028; they expect meaningful margin expansion in 2027 though final results will depend on membership size and composition.
Read all positive updates
Company Guidance
Humana guided that 2026 cost trends are expected to be high single‑digit (7–8% all‑in, with drug trend in the double digits and expected to tick modestly higher in 2027), Q2 consolidated operating cost ratio improved 120 basis points year‑over‑year (with a full‑year reduction of ~150 bps expected), and the company remains on track to double individual MA pretax margin in 2026 (excluding the Stars headwind) and to reach a sustainable pretax margin of at least 3% in 2028 with meaningful margin progress expected in 2027; bids incorporate contingency (submitted ~6 months ahead) and assume trends in line with 2026, plan exits are expected to affect ~600,000 members (with recapture similar to 2025 at just over 40% and many exits in plans with ≤3.5 ratings), BY‑28 Stars operational progress outpaced historical CAGR on 11 of 12 selected HEDIS/patient‑safety measures and top‑quartile Stars is defined as Stars revenue PMPM 10% above the peer median, BY‑29 quality improvement remains ~5% ahead year‑over‑year on a per‑member basis, IBNR was flat sequentially after earlier year‑over‑year increases, Humana established $1.5 billion of contingent P‑Cap facilities and announced a ~$900 million Gentiva minority‑interest divestiture expected to close in Q4, and the company won a statewide Illinois Medicaid contract going live January 2027 as the only new entrant among six carriers.Humana Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
66
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 145.68B | 129.66B | 117.81B | 106.44B | 92.92B | 83.65B |
| Gross Profit | 19.89B | 18.85B | 17.15B | 18.05B | 17.23B | 14.45B |
| EBITDA | 3.10B | 2.91B | 3.25B | 4.73B | 4.81B | 4.46B |
| Net Income | 1.28B | 1.19B | 1.21B | 2.49B | 2.81B | 2.93B |
Balance Sheet | ||||||
| Total Assets | 57.20B | 48.75B | 46.31B | 46.89B | 43.73B | 44.75B |
| Cash, Cash Equivalents and Short-Term Investments | 23.87B | 4.20B | 2.22B | 4.69B | 5.06B | 3.39B |
| Total Debt | 14.25B | 12.94B | 12.26B | 12.27B | 11.75B | 13.22B |
| Total Liabilities | 37.92B | 31.01B | 29.87B | 30.57B | 28.36B | 28.64B |
| Stockholders Equity | 19.21B | 17.66B | 16.38B | 16.26B | 15.31B | 16.08B |
Cash Flow | ||||||
| Free Cash Flow | -443.00M | 375.00M | 2.39B | 2.98B | 3.45B | 920.00M |
| Operating Cash Flow | 147.00M | 921.00M | 2.97B | 3.98B | 4.59B | 2.26B |
| Investing Cash Flow | -1.21B | 2.27B | -2.95B | -3.49B | -1.01B | -6.56B |
| Financing Cash Flow | 1.53B | -1.22B | -2.49B | -856.00M | -1.91B | 3.02B |
Humana Technical Analysis
Positive
389.71
Price Trends
394.52
Positive
384.21
Positive
301.21
Positive
Market Momentum
8.90
Negative
54.94
Neutral
54.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUM, the sentiment is Positive. The current price of 389.71 is below the 20-day moving average (MA) of 400.83, below the 50-day MA of 394.52, and above the 200-day MA of 301.21, indicating a bullish trend. The MACD of 8.90 indicates Negative momentum. The RSI at 54.94 is Neutral, neither overbought nor oversold. The STOCH value of 54.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HUM.
Humana Risk Analysis
Humana disclosed 16 risk factors in its most recent earnings report. Humana reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Humana Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $79.88B | 12.47 | 15.24% | 2.05% | 8.15% | 31.47% | |
70 Outperform | $360.32B | 22.91 | 16.10% | 2.26% | 3.33% | ― | |
70 Outperform | $92.88B | 19.03 | 11.24% | 1.60% | 6.27% | -4.37% | |
65 Neutral | $49.61B | 38.81 | 6.91% | 0.86% | 18.33% | -18.53% | |
62 Neutral | $118.13B | 24.11 | 6.43% | 2.88% | 7.41% | 6.51% | |
57 Neutral | $34.16B | -6.65 | -24.03% | ― | 13.89% | -356.11% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
HUM
Humana
414.98
134.04
47.71%
CNC
Centene
68.63
33.02
92.73%
CI
Cigna
298.50
-1.54
-0.51%
CVS
CVS Health
92.68
12.74
15.93%
UNH
UnitedHealth
406.88
51.85
14.61%
ELV
Elevance Health
430.23
83.06
23.93%
Humana Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Humana Forms New CenterWell Clinics Venture With BlackRock
Positive
Oct 13, 2026
On October 13, 2026, Humana announced a new joint venture with funds and accounts managed by HPS Investment Partners, part of BlackRock, to manage nearly 150 CenterWell Senior Primary Care clinics previously held in ventures with Welsh, Carson, An...
Business Operations and StrategyFinancial Disclosures
Humana boosts 2028 Stars revenue outlook, affirms guidance
Positive
Oct 9, 2026
Humana reported that, based on final 2027 Medicare Advantage Star Ratings data for the 2028 bonus year released by CMS on October 8, 2026, it exceeded its goal of achieving top-quartile performance in Stars-related revenue per member. The company ...
Business Operations and StrategyFinancial Disclosures
Humana Reaffirms 2026 Earnings Guidance to Investors
Positive
Sep 1, 2026
Humana said members of its senior management team planned to meet investors and analysts between September 1 and September 30, 2026, where they intended to reaffirm full-year 2026 guidance of at least $6.52 in GAAP diluted EPS and at least $9.00 i...
Business Operations and StrategyExecutive/Board Changes
Humana Expands Board With Technology and Finance Leaders
Positive
Jul 29, 2026
On July 28, 2026, Humana’s Board of Directors expanded its size from 11 to 13 members and elected Paul Smith and Frederick J. Crawford as independent directors, a move announced publicly on July 29, 2026. Smith, currently Chief Commercial Of...
Business Operations and StrategyFinancial Disclosures
Humana Affirms 2026 Outlook Amid Strong Q2 Results
Positive
Jul 29, 2026
Humana reported second-quarter 2026 results on July 29, 2026, posting GAAP earnings per share of $5.73 and adjusted EPS of $7.61, with year-to-date GAAP EPS of $15.55 and adjusted EPS of $17.91. The Insurance segment’s 2Q26 benefit ratio of ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.