Humana Inc.

HUM
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
TTM ROIC
3.9%
FY2025 · Net Income / (Total Equity + Total Debt) · WACC ~8% · Moat spread +-4.1pp

Financial Snapshot


ticker: HUM step: 04 generated: 2026-05-12 source: quick-research

Humana Inc. (HUM) — Financial Snapshot

Income Statement Summary

Metric FY2022 FY2023 FY2024 FY2025 YoY (25v24)
Revenue $92.9B $106.4B $117.8B $129.7B +10.1%
GAAP EPS (diluted) ~$22.40 $20.00 $9.98 $9.84 -1.4%
Adj. EPS (non-GAAP) $25.20 $26.09 $16.21 ~$17.14 (normalized)
Net Income $2.81B $2.49B $1.21B $1.20B ~flat
Medical Loss Ratio (MA) ~86% ~87% ~90%+ ~91–92%

GAAP EPS collapsed in 2024 driven by higher-than-expected MA medical cost trend and a $541M Q4 2024 loss. 2025 stabilized at low base; the 2026 hit comes from the STAR rating bonus payment cliff.

Cash Flow & Balance Sheet (FY2025)

Metric Value
Operating Cash Flow ~$3B (compressed by MA margin pressure)
Capex ~$1.0B
Free Cash Flow ~$2B
Cash & Investments ~$22B (regulated insurance reserves dominate)
Total Debt ~$13B
Net Cash position varies by year-end working capital

Key Ratios (approximate, May 2026)

  • P/E (TTM, GAAP): ~25x — distorted by depressed earnings | EV/EBITDA: ~12x | FCF Yield: ~5–7%
  • Revenue Growth (TTM): ~10% | MLR: ~92%+ | Operating Margin: ~1–2% (compressed)
  • Trading at deep discount to historical "quality compounder" multiple

Membership / Segment Stats (FY2025 / FY2026)

  • 2025 individual MA membership: ~5.7M
  • 2026 individual MA membership growth target: ~25% YoY
  • Operating county footprint: 85% of US counties (down from 89%)
  • CenterWell Primary Care patients: +100,600 in 2025 (+25%)
  • 2025 STAR ratings: 25% of MA members in 4+ star plans (down from 94% in 2024)
  • 2026 STAR ratings: 14% of MA members in 4.5+ star plans (modest improvement from 3% in 2025)

Growth Profile

Humana is in the middle of a multi-year cyclical earnings reset:

  1. 2024 medical cost trend shock — MA utilization persisted at elevated levels, compressing MLR
  2. 2025 STAR ratings collapse — Largest drop of any major MA insurer; analyst estimate $1–3B 2026 revenue impact from lost quality bonus payments
  3. 2026 EPS guidance ~$9 — vs. peak normalized EPS of ~$26 in 2023; reflects deepest cyclical compression in years
  4. 2027–2028 recovery path — Consensus models EPS recovery to ~$15 in 2027, ~$26 in 2028 IF: (a) medical cost trend normalizes, (b) STAR ratings recover for 2027 bonus year, (c) 5% effective CMS rate increase materializes, (d) county footprint pruning + benefit design discipline holds margins

Litigation status: Humana sued HHS over STAR ratings; lost initial challenge, refiled, lost again, currently appealing to 5th Circuit. Any litigation win would create binary upside catalyst.

Forward Estimates

2026 guidance: "At least $8.89" GAAP EPS / "at least $9.00" adjusted EPS — decline from 2025 due to STAR Ratings headwind net of mitigation. MLR ~92.75% expected. Bull-side scenarios pencil in cyclical recovery + STAR re-rating + CMS rate normalization driving EPS to ~$15 in 2027 and ~$26 in 2028. Bear-side scenarios extend the STAR / medical cost pressure into 2027 with EPS staying below $12 and continued multiple compression.

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $HUM.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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