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Louisville, Kentucky-based Humana Inc. (HUM) is a healthcare plan provider, committed to helping people lead a healthy and happy life. With a market cap of $34.5 billion, Humana offers medical and specialty insurance products in the United States and operates through Insurance and CenterWell segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," Prudential fits this bill perfectly. Given the company operates as one of the largest health insurance providers in the United States, its valuation above this mark is not surprising. The company provides nearly 17 million medical memberships annually.
Despite its strengths, Humana has plunged 41.5% from its 52-week high of $488.89 touched on Dec. 13, 2023. HUM stock has plummeted 17.5% over the past three months, underperforming the S&P 500 Index’s ($SPX) 9.8% gains during the same time frame.
Over the longer term, Humana’s performance looks even grimmer. HUM stock has plunged 37.6% on a YTD basis and 40.7% over the past 52 weeks, substantially underperforming SPX’s 26.5% gains in 2024 and 31.1% returns over the past year.
To confirm the bearish trend, HUM has traded mostly below its 200-day moving average over the past year and below its 50-day moving average since late July with minor fluctuations.
Humana stock prices rose 3.3% after the release of its mixed Q3 results on Oct. 30 as the company’s adjusted EPS of $4.16 surpassed analysts’ estimates by an impressive 19.5%. However, its earnings are still down 46.5% compared to the year-ago quarter, primarily due to a 15.5% increase in benefits expense to $25.1 billion. Meanwhile, the company has also observed a significant drop in cash flows, its operating cash flows for the previous three quarters have dropped 68.6% year-over-year to $3.5 billion.
On a positive note, Humana’s total revenues have surged 11.3% year-over-year to $29.4 billion driven by robust growth in premium collection.
Humana has underperformed its peer the Cigna Group’s (CI) 4% gains on a YTD basis and 20.3% returns over the past year.
Among the 24 analysts covering the HUM stock, the consensus rating is a “Moderate Buy.” The mean price target of $302.14 represents a 5.7% premium to current price levels.
