Humana (HUM)
Health Care · $51.4B market cap · SEC CIK 0000049071
ahead of 9% of the S&P 500 · #56 of 59 in Health Care
Next reports on Feb 9, 2027, after the close, with analysts expecting −$7.76 in earnings per share.
52-week range $163.11 to $456.50. 4% below its 52-week high and 169% above its low.
The case for HUM
- Revenue up 22.0% on the year.
- Has compounded revenue at 10.9% a year over five years.
- Moves less than the market (beta 0.63).
- Within 4% of its 52-week high: the trend is up.
- Up 67.9% over the past year.
- Price/sales of 0.3× is lower than 90% of Health Care companies.
The case against
- Expensive for its growth: 41.3× earnings, where 5% a year of growth plus a 0.7% dividend would justify about 17×.
- Long-term debt of $12.4B would take 13 years of operating cash flow to repay.
- Return on equity of only 7%.
- Net margin of 0.8% leaves very little room for error.
- Only 32% of FY2025's $1.2B profit arrived as free cash.
- Current liabilities exceed current assets (ratio 0.01).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Health Care companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 16 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 43 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 19 |
| Momentumhow the price has behaved lately | 85 |
| Stabilityhow violently it moves, what it owes and what it pays you | 27 |
- Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +22.0% |
|---|---|
| Over 5 years | +10.9% a year |
| FY2025 revenue | $130B (+10%) |
Free cash flow
Is it generating real cash? Less than its profits suggest
| FY2025 free cash flow | $375M |
|---|---|
| Of revenue | 0% |
| Of profit | 32% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | n/a |
|---|---|
| Operating margin | 2% |
| Net margin, FY24 → FY25 → now | 1.0% → 0.9% → 0.8% |
Debt vs. cash
Is the balance sheet healthy? Stretched
| Cash | $4.2B |
|---|---|
| Long-term debt | $12.4B |
| Net debt | $8.2B |
| Years to repay | 13.4 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 41.3× |
|---|---|
| Fair P/E for its growth | 17× |
| P/FCF | 137.1× |
| Forward P/E | 26.9× |
| EV / EBITDA | 18.9× |
At 41.3× earnings it trades well above the 17× that 5% a year of growth plus a 0.7% dividend would justify. At 137.1× free cash flow it trades well above that same mark.
The financials, five years deep
Pulled from Humana's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $130B | $118B | $106B | $92.9B | $83.1B |
| Change on the year | +10% | +11% | +15% | +12% | — |
| Free cash flow | |||||
| Free cash flow | $375M | $2.4B | $3.0B | $3.5B | $920M |
| Of revenue | 0% | 2% | 3% | 4% | 1% |
| Profit margins | |||||
| Operating margin | 2.1% | 2.2% | 3.8% | 4.1% | 3.8% |
| Net margin | 0.9% | 1.0% | 2.3% | 3.0% | 3.5% |
| Debt vs. cash | |||||
| Cash | $4.2B | $2.2B | $4.7B | $5.1B | $3.4B |
| Long-term debt | $12.4B | $11.1B | $10.2B | $9.0B | $10.5B |
| Net cash (debt) | −$8.2B | −$8.9B | −$5.5B | −$4.0B | −$7.1B |
What Humana says it does
Headquartered in Louisville, Kentucky, Humana Inc. and its subsidiaries, referred to throughout this document as “we,” “us,” “our,” the “Company” or “Humana,” is committed to putting health first – for our teammates, our customers, and our company. Through our Humana insurance services, and our CenterWell health care services, we make it easier for the millions of people we serve to achieve their best health – delivering the care and service they need, when they need it. These efforts are leading to a better quality of life for Medicare and Medicaid participants, families, individuals, military service personnel, and communities at large. As of December 31, 2025, we had approximately 15 million members in our medical benefit plans, as well as approximately 4.7 million members in our specialty products. During 2025, 83% of our total premiums and services revenue were derived from contracts with the federal government, including 14%…
Risk factors HUM lists in its 10-K
- As a government contractor, we are exposed to risks that may materially adversely affect our business or our willingness or ability to participate in government health care programs
- New Laws or Regulations, or Future Legislative, Judicial or Regulatory Changes
- Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH Act)
- Corporate Practice of Medicine and Other Laws
- Anti-Kickback, Physician Self-Referral, and Other Fraud and Abuse Laws
- State Regulation of our Products and Services
- Any failure by us to manage acquisitions, divestitures and other significant transactions successfully may have a material adverse effect on our results of operations, financial position, and cash flows
- If we fail to develop and maintain satisfactory relationships with the providers of care to our members, our business may be adversely affected
- Our pharmacy solutions business is highly competitive and subjects us to regulations and distribution and supply chain risks in addition to those we face with our core health benefits businesses
- Changes in the prescription drug industry pricing benchmarks may adversely affect our financial performance
- Our ability to obtain funds from certain of our licensed subsidiaries is restricted by state insurance regulations
- Downgrades in our debt ratings, should they occur, may adversely affect our business, results of operations, and financial condition