HUM

Healthcare

Humana

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$25.3B	$28.9B	$31.0B	$33.9B	$36.8B	$39.1B	$41.3B	$48.5B	$54.3B	$54.4B	$53.8B	$56.9B	$64.9B	$77.2B	$83.1B	$92.9B	$106.4B	$117.8B	$129.7B	+10.1%
Operating Income	$1.4B	$1.1B	$1.7B	$1.9B	$2.3B	$2.0B	$2.1B	$2.4B	$2.3B	$1.7B	$4.3B	$3.1B	$3.2B	$5.0B	$3.1B	$3.8B	$4.0B	$2.6B	$2.7B	+5.5%
Operating Margin	5.4%	3.7%	5.5%	5.5%	6.4%	5.2%	5.0%	4.9%	4.3%	3.2%	7.9%	5.4%	4.9%	6.5%	3.8%	4.1%	3.8%	2.2%	2.1%	-0.1pp
Net Income	$833.7M	$647.2M	$1.0B	$1.1B	$1.4B	$1.2B	$1.2B	$1.1B	$1.3B	$614.0M	$2.4B	$1.7B	$2.7B	$3.4B	$2.9B	$2.8B	$2.5B	$1.2B	$1.2B	-1.6%
Net Margin	3.3%	2.2%	3.4%	3.2%	3.9%	3.1%	3.0%	2.4%	2.4%	1.1%	4.6%	3.0%	4.2%	4.4%	3.5%	3.0%	2.3%	1.0%	0.9%	-0.1pp
Free Cash Flow	$985.0M	$720.7M	$1.2B	$2.0B	$1.7B	$1.5B	$1.3B	$1.1B	$345.0M	$1.4B	$3.5B	$1.6B	$4.5B	$4.7B	$946.0M	$3.5B	$3.0B	$2.4B	$375.0M	-84.3%
FCF Margin	3.9%	2.5%	4.0%	6.0%	4.7%	3.9%	3.1%	2.2%	0.6%	2.6%	6.6%	2.7%	7.0%	6.1%	1.1%	3.7%	2.8%	2.0%	0.3%	-1.7pp
EPS (Diluted)	$4.91	$3.83	$6.15	$6.47	$8.46	$7.47	$7.73	$7.36	$8.44	$4.07	$16.81	$12.16	$20.10	$25.31	$22.67	$22.08	$20.00	$9.98	$9.84	-1.4%

Total Debt$12.4B

Cash & Equiv.$4.2B

Net Debt$8.2B

3 min read

1. THE BIG PICTURE

Humana is a pure-play bet on the U.S. government’s Medicare Advantage program, with approximately 93% of its premiums and services revenue tied to federal and state contracts (Risks). While Humana is aggressively building out its "CenterWell" integrated care delivery arm to capture more value from each patient, it remains structurally vulnerable to the very regulators who provide its revenue.

2. WHERE THE RISKS HIT HARDEST

Humana's "Integrated Care Delivery" model is threatened by the "Medicare Advantage Star Ratings" decline because the strategy relies on high member engagement and quality scores to secure the CMS bonus payments that fund these coordinated services (10-K Item 1, Risks). Furthermore, the "Geographic Diversity" of its network—offering plans in all 50 states—is offset by "RADV Audit Methodology" risks; a larger national footprint increases exposure to CMS's expanded audit efforts for payment years 2018 through 2024, which could result in material adverse effects on cash flows (10-K Item 1, Risks).

3. WHAT THE NUMBERS SAY TOGETHER

Despite reporting a GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow net loss of $6.61 per share in the fourth quarter of 2025, Humana maintains the highest free cash flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin in its peer group at 3.1% (Recent Results, XBRL). This suggests the underlying business generates significant cash even when non-cash charges and "Star Ratings headwinds" depress reported earnings. However, its 10.1% revenue growth trails peers like ELV (+12.5%) and CI (+11.2%), indicating that while Humana is efficient at converting sales to cash, it is currently growing more slowly than its diversified rivals (XBRL). Short interest at 4.8% of the float suggests a segment of the market remains skeptical of the 2026 recovery narrative (Supplemental Signals).

4. IS IT WORTH IT AT THIS PRICE?

At 11.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Humana is trading in line with the peer median (XBRL). The market is pricing in a long-term growth rate of roughly 0.5% (CAPM analysis). This appears cautious given that Humana grew its CenterWell patient base by 25% in 2025 and anticipates individual Medicare Advantage membership growth of approximately 25% in 2026 (Recent Results). However, this valuation is justified by the fact that 2026 GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric guidance of "at least $8.89" represents a decline from prior levels, attributed to the "Star Ratings headwind" (Recent Results). Investors are currently paying a fair-value price for a business that is shrinking its bottom line to navigate a difficult regulatory cycle.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if 2026 Medicare Advantage membership growth exceeds the projected 25% without a corresponding spike in the benefit expense ratio, proving that "customer-led benefit strategy" changes are driving profitable scale (Recent Results).
Cautious if CMS RADV audit settlements for the 2018-2024 period result in cash outflows that significantly exceed the current net debt position of $7.6 billion (Risks, XBRL).

6. BOTTOM LINE

Structural Advantage: Vertical integration of senior-focused primary care, pharmacy, and home health services through the CenterWell brand, which allows Humana to align provider incentives with total cost reduction (10-K Item 1).

Bottom Line: Humana is a high-cash-flow operator currently sidelined by a major regulatory earnings reset; it remains a hold until the full impact of the Star Ratings decline is absorbed into the 2026 results.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Medicare Advantage Star Ratings: A significant decline in the number of Medicare Advantage members in plans rated 4-star or higher for 2025 threatens to negatively impact 2026 quality bonus payments from CMS and overall operating results.
Government Program Concentration: Approximately 93% of total premiums and services revenue for the year ended December 31, 2025, was derived from federal and state government health care programs, making Humana highly sensitive to policy shifts, eligibility changes, and reimbursement rate reductions.
RADV Audit Methodology: The finalization of the CMS RADV audit rule—which eliminates the Fee-for-Service (FFS) Adjuster—and the subsequent expansion of audit efforts for payment years 2018 through 2024, could result in material adverse effects on financial position and cash flows.
Benefit Expense Estimation: Because premiums are generally fixed for one-year periods, Humana’s profitability is highly sensitive to the accuracy of actuarial estimates for medical costs; if actual costs exceed projections due to medical inflation or utilization trends, Humana cannot recover these costs through higher premiums within the contract year.
Cybersecurity and Data Integrity: As a processor of large amounts of sensitive personal information, Humana is a target for cybersecurity attacks; incidents like the February 2024 Change Healthcare disruption demonstrate the potential for operational and financial impact, including regulatory fines and reputational damage.

2. Company-Specific Risks

Florida Market Concentration: At December 31, 2025, Humana provided coverage to approximately 1.0 million individual Medicare Advantage members in Florida, representing approximately 14% of total premiums and services revenue.
Integrated Care Delivery Model: The success of the CenterWell businesses and the integrated care delivery model depends on the ability to recruit and retain medical professionals and manage risk-sharing contracts, which, if unsuccessful, could lead to asset write-offs or restructuring costs.
Pharmacy Solutions Competition: The in-house dispensing pharmacy business faces intense competition from retail chains, internet companies, and mail-order pharmacies, and is subject to specific regulatory risks regarding the distribution of controlled substances and potential changes to drug pricing benchmarks like Average Wholesale Price (AWP).
Holding Company Structure: Humana Inc. is a holding company dependent on dividends and administrative expense reimbursements from subsidiaries, which are restricted by state insurance regulations regarding capital adequacy and statutory surplus levels.

3. Regulatory/Legal Risks

Administrative Procedure Act (APA) Litigation: Humana is currently involved in litigation (Humana v Kennedy) regarding the validity of the Final RADV Rule; while the district court vacated the rule in September 2025, the government has appealed, leaving the final disposition and potential financial impact uncertain.
Fraud and Abuse Laws: Humana is subject to the False Claims Act, the Anti-Kickback Statute, and the Stark Law; violations could result in the loss of licensure, exclusion from Medicare/Medicaid, or substantial civil and criminal penalties.
Corporate Practice of Medicine: Many states limit the practice of medicine to licensed individuals, and Humana’s reliance on management agreements with affiliated physician-owned professional groups could be challenged by regulators, potentially requiring business restructuring.
Privacy Regulations: Compliance with HIPAA and the HITECH Act requires significant administrative effort and systems investment; unauthorized release of protected health information (PHI) can lead to significant monetary penalties and media notification requirements.

4. Financial Impact Map

Medicare Advantage Star Ratings Decline → Premiums and Services Revenue → The decline in 4-star plans for 2025 will negatively impact 2026 quality bonus payments from CMS.

Government Program Concentration → Premiums and Services Revenue → Legislative or regulatory changes to Medicare, military services, or Medicaid programs directly shape the premiums and revenues received by Humana.

RADV Audit Methodology → Results of Operations / Financial Position → The lack of an FFS Adjuster and the acceleration of audits for payment years 2018–2024 could lead to material settlements or recoveries by CMS.

Benefit Expense Estimation Variability → Benefits Expense / Operating Expenses → Inaccurate actuarial assumptions regarding claim payment patterns or medical inflation result in costs exceeding projections, which cannot be recovered via premium adjustments within the contract year.

Cybersecurity Incidents → Operating Expenses → Costs to detect, prevent, and remediate threats, combined with potential regulatory fines and litigation, directly increase operating expenses and threaten cash flows.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
14A	Mar 2026	—
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Nov 2025	Sep 2025