Humana Inc. (HUM)
Valuation Overview•Is Humana Inc. Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Fragile underlying quality score of 31/100; weak margins or elevated debt leverage warrant caution.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Highly distressed profile flashing severe fundamental warning signs.
Wall Street is cautious, forecasting potential downside. However, capital return yields remain modest, anchored by a strong dividend yield, though free cash flow coverage appears tight.
HUM struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (11.7% 3Y CAGR) however, earnings have severely contracted over the same period. However, profitability remains a major concern with severely compressed operating margins (1.0%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $39.6B | +10.1% | +11.7% | +10.9% | +9.1% | |
| EBITDA | $1.8B | — | -19.8% | — | — | |
| Net Income | $1.2B | -1.6% | -24.9% | — | -0.7% | |
| EPS (Diluted) | $9.83 | -1.4% | -23.6% | -17.2% | +1.5% | |
| Free Cash Flow | $1.1B | -84.3% | -52.3% | -39.6% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 14.0% | 15.3% | 16.4% | 16.7% |
| Operating Margin | 1.0% | 1.9% | 2.7% | 3.8% |
| Net Margin | 0.8% | 1.4% | 2.2% | 2.8% |
| FCF Margin | 0.9% | 1.7% | 2.0% | 3.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $10.24 | $10.31 | +0.7% | ||
| Q1'26 | $-4.00 | $-3.96 | +1.0% | ||
| Q4'25 | $2.93 | $3.24 | +10.6% | ||
| Q3'25 | $5.92 | $6.27 | +5.9% | ||
| Q2'25 | $10.07 | $11.58 | +15.0% | ||
| Q1'25 | $-2.23 | $-2.16 | +3.1% | ||
| Q4'24 | $3.40 | $4.16 | +22.4% | ||
| Q3'24 | $5.85 | $6.96 | +19.0% |
Total return is +49.6% (1Y), outperforming the benchmark by +24.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +36.7% | +27.4% | — |
| 1Y | +49.6% | +24.6% | +1.5% |
| 3YCAGR | -6.0% | -25.4% | +2.4% |
| 5YCAGR | -2.3% | -14.9% | +4.0% |
| 10YCAGR | +7.4% | -6.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Humana Inc. (HUM) valuation, health, and returns.
Humana Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. trading near fair value (DCF: $313.46)
Humana Inc. has multiple valuation anchors: DCF Intrinsic Value: $313.46 | Peer Relative Fair Value: $215.71 | Wall Street Analyst Target: $298.50 (implying -17.2% upside). A convergence of these signals offers higher conviction.
Humana Inc. displays weak financial health with a composite quality score of 31/100, supported by a Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 4.1%.
Humana Inc. pays a 1.0% dividend yield, covered by a 36% payout ratio with 0 years of growth, supplemented by a 0.3% buyback yield.
Humana Inc.'s current growth trajectory is Stable. The company achieved +10.1% 1Y revenue growth and -1.4% 1Y EPS growth, compared to its 3Y revenue CAGR of +11.7%.
Wall Street consensus is Hold based on 44 analysts, beating EPS expectations in 92% of recent quarters with a 9-quarter streak. The consensus price target represents a -17.2% change from current levels.
Investment risks for Humana Inc. include: -47.5% 1-year max drawdown. Volatility risk is characterized by a beta of 0.57x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.