HUM changes
Pick any two versions below to diff them.
- Price
- $438.06
- Discount category
- Close to intrinsic value
- Next earnings
- Feb 6, 2027
- Next earnings is estimate
- Yes
- Company name
- added: Humana
- Sector
- added: Health insurance: Medicare Advantage and health care services
- About
- added: Humana Inc. (Humana) is a health insurance and health care company. Most of its revenue comes from Medicare Advantage plans, which the U.S. government pays Humana to run for people aged 65 and older and for some people with disabilities. At September 30, 2026, it had 6,456,900 individual Medicare Advantage members, 728,300 group Medicare Advantage members, 4,027,500 members in stand-alone prescription drug plans (PDP) and 1,614,100 members in state-based contracts such as Medicaid. The Insurance segment holds these plans. The CenterWell segment runs senior primary care centers with about 638,000 patients, a pharmacy business and home health services. Revenue was $41,155 million in Q3 2026, and Humana expects at least $160 billion for 2026. The shares trade on the New York Stock Exchange. The head office is in Louisville, Kentucky. Jim Rechtin is President and Chief Executive Officer.
- Thesis
- added: Humana's earnings fell because its Medicare Advantage plans got lower Star Ratings for the 2026 bonus year, which cut its quality bonus payments. Adjusted EPS was $17.14 in 2025, and Humana expects at least $9.50 in 2026. The share price rose strongly in 2026, so the market already expects a large recovery. Humana plans to return individual Medicare Advantage to a pre-tax margin of at least 3% in 2028, and its Star Ratings for the 2028 bonus year are above its Top Quartile goal. For the shares to earn more, three things must be true. The 2027 plan bids must raise margins while the members that joined in 2026 stay. Medical cost trends must stay in line with the plan of a high single-digit increase. And government payment rates, Star Ratings rules and risk adjustment audits must not take back the gains. The investor update on December 10, 2026 and the 2027 guidance, expected in February 2027, are the next tests.
- Risks
- added: The government sets Medicare Advantage payment rates and rules each year, and most of Humana's revenue comes from Medicare. Lower rates or changes to the risk model can reduce margins. Star Ratings change each year. Lower Star Ratings for the 2026 bonus year cut 2026 earnings, and Humana expects part of the gain in the 2028 bonus year to be one-time. The government plans to use risk adjustment data validation (RADV) audits with extrapolation from payment year 2018, without a fee-for-service adjuster. Humana disputes the rule and says that it can have a material adverse effect. Medical and drug costs can rise faster than Humana planned. The Insurance segment benefit ratio was 93.7% in Q3 2026, and Humana expects just above 95.5% in Q4 2026. Humana added about 1.2 million individual Medicare Advantage members in 2026. New members can cost more than expected, and members can leave when Humana changes prices or benefits. In the new CenterWell joint venture, CenterWell agreed to minimum return protections for BlackRock. If CenterWell does not buy all clinics by the end of 2033, BlackRock can start a sale of the remaining clinics.
- Balance sheet
- added: Cash: $6.9B Debt: $12.5B Net debt: $5.6B Undrawn credit line: $5.0B Debt due within 12 months: $949M Humana funds itself with senior notes, junior subordinated notes, commercial paper and a credit facility. Its insurance companies must hold capital under state rules, which limits the cash that they can pay to the parent company. At September 30, 2026, short-term debt was $949 million and long-term debt was $11,555 million, a total of $12,504 million. Cash and cash equivalents were $6,935 million, but parent company cash and short-term investments were $528 million. The debt to total capitalization ratio was 40.9%, against a limit of 60% in the credit agreement. The $5.0 billion revolving credit facility was fully available, and there was no commercial paper. Humana expects the new CenterWell joint venture to lower the ratio by about 130 basis points in Q4 2026, and it expects to sell its minority interest in Gentiva, valued at about $900 million, in Q4 2026. On November 9, 2026, it offered to buy back up to $1.5 billion of senior notes. At September 30, 2026, there were 120,103,250 shares. The quarterly dividend is $0.885 per share. As of Sep 30, 2026.
- Checkpoints
- added: Nov 6, 2026: Q3 2026 results: benefit ratio. Passed. Watch: An Insurance segment benefit ratio near 94% or lower and no cut to the 2026 guidance pass; a higher ratio fails. Outcome: The Insurance segment benefit ratio was 93.7%, and Humana raised its 2026 adjusted EPS guidance to at least $9.50. Dec 10, 2026: Investor update: the path to 2028. Pending. Watch: A clear plan for a pre-tax margin of at least 3% in individual Medicare Advantage in 2028 passes; a later target fails. Feb 2027 (estimate): Q4 2026 results and the 2027 guidance. Pending. Watch: 2026 adjusted EPS of at least $9.50 and 2027 guidance for higher EPS pass; 2027 guidance below 2026 fails.
- Recent events
- added: Nov 9, 2026: Humana started cash tender offers to buy back up to $1.5 billion of eight series of its senior notes, which mature from 2027 to 2032. Nov 6, 2026: Humana reported Q3 2026 results. Revenue rose 26% to $41,155 million, and the Insurance segment benefit ratio was 93.7%. GAAP EPS was $1.33, and the adjusted loss was $0.70 per share, better than the company's plan of a loss of about $1.00. Humana raised its 2026 adjusted EPS guidance to at least $9.50, from at least $9.00. Oct 13, 2026: Humana agreed a new joint venture with HPS Investment Partners, a part of BlackRock, for nearly 150 CenterWell Senior Primary Care clinics. It replaces the joint ventures with Welsh, Carson, Anderson & Stowe and has no put option for the partner. The transaction closed in October 2026. Oct 9, 2026: Humana said that its 2027 Medicare Advantage Star Ratings, which set the bonus payments for 2028, are above its goal of Top Quartile results. It expects part of the gain to be one-time and plans to use it for one-time investments and returns to shareholders. Jul 29, 2026: Humana reported Q2 2026 results. GAAP EPS was $5.73, and adjusted EPS was $7.61. Humana kept its 2026 adjusted EPS guidance of at least $9.00. It also won a statewide Illinois Medicaid contract that starts in January 2027. May 15, 2026: Two trusts sold $1.5 billion of pre-capitalized trust securities for Humana. They give Humana the right to issue up to $1.5 billion of senior notes due 2036 and 2055 when it needs the money. Apr 29, 2026: Humana reported Q1 2026 results. GAAP EPS was $9.83, and adjusted EPS was $10.31. It kept its guidance of about 25% growth in individual Medicare Advantage membership for 2026. Mar 5, 2026: Humana sold $1.0 billion of 6.625% junior subordinated notes due 2056. Feb 11, 2026: Humana reported 2025 results. Adjusted EPS was $17.14, and GAAP EPS was $9.84. It gave 2026 adjusted EPS guidance of at least $9.00 and said that the lower Star Ratings for the 2026 bonus year cause the decline.