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what it is
Humana sells health plans and care services, mostly to people covered by government programs.
how it gets paid
Last year Humana made $129.7B in revenue. Government health plans was the main engine at $110.2B, or 85% of sales.
why it's growing
Revenue grew 10.1% last year. The percentage of humana’s ma members who were enrolled in 4+ star plans plunged from 94% in 2024 to 25% in 2025.
what just happened
Humana's $32.5B quarter looked fine on sales and ugly on profit.
At a glance
B+ balance sheet — decent shape, but not bulletproof
60/100 earnings predictability — reasonably predictable
10.7x trailing p/e — the market's not buying it — or you found a deal
1.9% dividend yield — cash in your pocket every quarter
7.5% return on capital — nothing to write home about
xvary composite: 49/100 — below average
What they do
Humana sells health plans and care services, mostly to people covered by government programs.
Humana had 15.0 million medical members at the end of 2024. Replacing that base costs money and time. If you are already inside the system, your plan, claims, and care are hard to move. premiums and services revenue, which means money from policies and service fees, was 85% tied to the federal government.
How they make money
$129.7B
annual revenue · their business grew +10.1% last year
Government health plans
$110.2B
Employer group plans
$6.0B
Individual plans
$5.8B
Specialty products and services
$7.7B
The products that matter
medicare advantage insurance
Medicare Advantage plans
85% of premiums · core engine
this is the business that matters most. About 85% of premiums come from federal programs, and 4+ star enrollment fell from 94% in 2024 to 25% in 2025.
bonus-sensitive
pharmacy and care delivery
CenterWell
supports earnings mix
management cited solid performance here, but this snapshot does not include segment revenue. What you do know: it was not enough to stop 2026 EPS guidance from resetting to at least $9.00 from $17.14 in 2025.
helpful, not decisive
enterprise profit pool
overall margin structure
1.0% net margin
on $129.7B of revenue, Humana kept only 1.0% as profit. That's why small changes in reimbursement or medical costs can hit earnings so hard.
the real swing factor
Key numbers
$129.7B
annual revenue
You are buying a $22B stock with $129.7B in yearly sales. That gap is the whole story.
10.7x
trailing p/e
Price to last year's profit. You pay $10.70 for $1 of earnings. Cheap usually means fear, and Humana has plenty.
1.9%
dividend yield
Cash paid to you each year. It beats cash in a bank, but not a broken business.
3.2%
operating margin
Money left after running the business. Humana keeps $3.20 from each $100 of revenue, which leaves little room for mistakes.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $12.4B (36% of capital)
- net profit margin 1.3% — keeps 1 cents of every dollar in revenue
- return on equity 11% — $0.11 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in HUM 3 years ago → it's now worth $3,790.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Humana's $32.5B quarter looked fine on sales and ugly on profit.
Revenue rose 11.6% vs. prior year. Adjusted EPS came in at -$3.96 versus -$3.84 expected, a 3.1% miss.
$32.5B
revenue
-$3.96
eps
3.1%
surprise
the number that mattered
The key number was -$3.96 EPS. Sales grew, but profit still missed, which says the cost problem is still in the room.
-
humana reported fourth-quarter results that met expectations.
-
december-period revenues of $32.5 billion represented an 11.6% vs. prior year increase, with the top line again driven by higher per-member medicare and state-based contract premiums.the adjusted loss per share of $3.96 in the seasonallyweak december interim nonetheless allowed for a full-year share-net tally of $17.14, slightly above projection. full-year results were underpinned by solid performance across the insurance and centerwell segments.
-
leadership provided a tepid outlook for 2026.
-
adjusted earnings per share of ‘‘at least $9.00’’ are projected, representing a steep annual decline.humana is facing a substantial star ratings headwind that figures to impact the top line by as much as $3.5 billion, owing to a drop in cms (centers for medicare & medicaid services) star ratings for the company’s medicare advantage (ma) plans. cms utilizes a five-star rating system to evaluate humana’s plans based on member experience, call center accuracy, safety, and health services, which, in turn, influences the degree of bonus payments made to the insurer.
-
the percentage of humana’s ma members who were enrolled in 4+ star plans plunged from 94% in 2024 to 25% in 2025, thereby impacting bonus eligibility, compressing margins, and impacting earnings visibility.
source: company earnings report, 2026
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What could go wrong
Humana's biggest problem is Medicare Advantage economics breaking at the same time as star ratings slip. This is a reimbursement and cost-control story, not a branding story.
high
medical cost inflation
Care costs are rising faster than pricing and reimbursement can offset. Management already tied this to a much weaker 2026 earnings outlook.
The proof is in the numbers: full-year EPS went from $17.14 in 2025 to guidance of at least $9.00 for 2026.
high
star ratings pressure
CMS star ratings drive bonus payments in Medicare Advantage. When quality scores drop, the economics get worse fast.
Humana said this pressure could hit revenue by as much as $3.5B, while 4+ star membership fell from 94% to 25%.
med
government reimbursement dependence
About 85% of premiums come from Medicare and Medicaid programs. That scale helps until the payer changes the math.
When one customer effectively supports most of a $129.7B revenue base, policy changes are business changes.
med
regulatory and legal friction
Managed-care companies live under constant audit, billing scrutiny, and enforcement risk.
Humana paid a $32M False Claims Act settlement in 2025. For a 1.0% net margin business, even smaller hits matter.
About 85% of premiums come from federal programs, and the 4+ star enrollment drop from 94% to 25% already points to as much as $3.5B of revenue pressure before you even get to higher care costs.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
apr 29, 2026 earnings report
This is the next reality check on whether the Street's $9.75 EPS estimate is too high, too low, or finally close to management's new baseline.
risk
star ratings recovery
The big watch item is simple: does the 4+ star membership mix start climbing from 25%, or was 2025 the start of a longer bonus-payment problem.
metric
margin versus revenue
Revenue is expected to rise from $129.7B to $135B. If net margin stays near 1.0%, growth will not translate into the earnings rebound investors want.
trend
institutional buying versus business reality
Institutions were net buyers for two straight quarters. If that continues while estimates keep falling, you are looking at a recovery bet, not confirmation that the fundamentals are fixed.
Analyst rankings
short-term outlook
below average
outlook rank 4 — analysts see weaker near-term performance than most stocks. In human-speak: they do not trust the earnings reset yet.
risk profile
average
risk rank 3 — not a bunker stock, not a disaster. The balance sheet is okay, but the business model is under pressure.
chart momentum
top 20%
momentum rank 2 — the stock's recent price action has improved. That's a chart signal, not proof the earnings problem is solved.
earnings predictability
60 / 100
Earnings are only moderately predictable. When policy formulas and medical costs shift, estimates move with them.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 447 buyers vs. 407 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$125
$313
$184
current price
$219
target midpoint · +19% from current · 3-5yr high: $315 (+70% · 16% ann'l return)
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