Humana Inc. - NYSE:HUM - Comprehensive analysis
Humana continues to be featured on our Best Ideas list, highlighting the significant discount at which its shares are currently trading compared to our fair value estimate. The company maintains a strong competitive position in the Medicare Advantage market and has substantial potential for long-term profit growth. However, the results for 2024 and the outlook for 2025 indicate severely reduced profits due to mispriced Medicare Advantage plans, which may take several years to recover. Additionally, initial star ratings for 2025 marketing and 2026 bonus payments have declined significantly, presenting another near-term challenge. Although the company is contesting these star ratings in court, this situation introduces uncertainty regarding Humana's intermediate-term profit trajectory, leading many investors to sell their shares. While these investors may be acting out of fear, we believe that those with a long-term investment perspective should take advantage of Humana's discounted shares, which offer a rare combination of a high-quality firm at an attractive valuation within the managed care sector.
Free evaluation through quantitative algorithms Humana Inc. - NYSE:HUM
Growth-Scoring Model Detail
Total Revenue Growth Over Prior Year | 10.7 | Market 76 Sector 65 |
Gross Profit Growth Over Prior Year | -4.91 | Market 12 Sector 15 |
EBITDA Growth Over Prior Year | -32.14 | Market 4 Sector 7 |
EBITA Growth Over Prior Year | -33.65 | Market 5 Sector 10 |
EBIT Growth Over Prior Year | -33.99 | Market 6 Sector 11 |
Earnings from Cont. Ops. Growth Over Prior Year | -51.13 | Market 7 Sector 11 |
Net Income Growth Over Prior Year | -51.51 | Market 8 Sector 11 |
Normalized Net Income Growth Over Prior Year | -46.58 | Market 4 Sector 6 |
Diluted EPS before Extra Growth Over Prior Year | -50.1 | Market 7 Sector 10 |
A/R Growth Over Prior Year | 32.9 | Market 96 Sector 86 |
Inventory Growth Over Prior Year | 0 | Market 66 Sector 48 |
PPE Net Growth Over Prior Year | -15.9 | Market 4 Sector 27 |
Total Assets Growth Over Prior Year | -1.25 | Market 28 Sector 46 |
Tangible Book Value Growth Over Prior Year | 5.62 | Market 44 Sector 59 |
Common Equity Growth Over Prior Year | 0.69 | Market 36 Sector 57 |
Cash from Ops. Growth Over Prior Year | -25.5 | Market 12 Sector 18 |
CAPEX Growth Over Prior Year | -42.73 | Market 3 Sector 27 |
Dividend per Share Growth Over Prior Year | 0 | Market 36 Sector 48 |
Levered Free Cash Flow Growth Over Prior Year | 0 | Market 0 Sector 0 |
Unlevered Free Cash Flow Growth Over Prior Year | 0 | Market 0 Sector 0 |
Profitability-Scoring Model Detail
Gross Margin % | 14.52 | Market 12 Sector 31 |
SG&A Margin % | 11.22 | Market 43 Sector 28 |
EBITDA Margin % | 2.85 | Market 3 Sector 61 |
EBITA Margin % | 2.63 | Market 10 Sector 64 |
EBIT Margin % | 2.58 | Market 5 Sector 65 |
Earnings from Cont. Ops Margin % | 1.03 | Market 6 Sector 72 |
Net Income Margin % | 1.02 | Market 6 Sector 72 |
Net Income Avail. for Common Margin % | 1.02 | Market 6 Sector 72 |
Normalized Net Income Margin % | 1.11 | Market 4 Sector 69 |
Levered Free Cash Flow Margin % | -1.11 | Market 12 Sector 30 |
Unlevered Free Cash Flow Margin % | -0.76 | Market 11 Sector 29 |
Return on Assets % | 4.07 | Market 38 Sector 81 |
Return on Capital % | 6.56 | Market 42 Sector 84 |
Return on Equity % | 7.41 | Market 19 Sector 81 |
Return on Common Equity % | 7.4 | Market 19 Sector 82 |
Total Asset Turnover | 2.52 | Market 98 Sector 99 |
