Humana Inc (HUM) stock analysis

P/E above its 5-year median

Humana's P/E of 43.3 is above its own 5-year median of 21.2.

P/E above the industry

Humana's P/E of 43.3 is above the Accident and Health Insurance and Medical median of 21.3.

P/S below the industry

Humana's price-to-sales of 0.35 is below the Accident and Health Insurance and Medical median of 0.80.

P/B above the industry

Humana's price-to-book of 2.85 is above the Accident and Health Insurance and Medical median of 2.31.

Trading above fair value

The share price of $446.31 is above our fair value estimate of $298.10.

Margin of safety under 20%

The price is 49.7% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 11.8% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -23.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -3.5% over the last twelve months, against a 5-year average of -18.8% a year.

Growing faster than the industry

Revenue grew 22.0% over the last twelve months; the Accident and Health Insurance and Medical median is 6.8%.

Guidance lowered

Humana lowered its FY 2026 GAAP EPS outlook on Jul 29, 2026.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 6.7% over the last twelve months and averaged 13.5% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 2.3%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Humana's return on equity of 6.7% is below the Accident and Health Insurance and Medical median of 11.9%.

Earnings shrank over 5 years

Net income shrank 18.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 0.8% over the last twelve months, against a 5-year average of 2.2%.

Net margin below the industry

Humana's net margin of 0.8% is below the Accident and Health Insurance and Medical median of 2.0%.

High debt

Debt is 66.4% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 48.5% five years ago to 66.4%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 29.8% of total debt.

Interest not well covered

Operating income covers interest expense 3.2 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.65 times current liabilities.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

Humana paid dividends worth 0.6% of the share price over the last twelve months.

Yield below Treasuries

The 0.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Humana yields 0.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 34.4% of net income.

Covered by free cash flow

Dividends take 13.7% of free cash flow.