Humana (NYSE:HUM) Releases Earnings Results, Beats Estimates By $0.30 EPS

Key Points

• Humana reported a quarterly loss of $0.70 per share, beating estimates for a $1.00 loss, while revenue rose 26.1% year over year to $41.16 billion and topped expectations.
• The company raised its 2026 adjusted EPS outlook to at least $9.50, up from at least $9.00, citing favorable cost trends and better-than-expected results.
• Humana expects Medicare Advantage membership growth in 2027, but forecasts medical cost trends rising to 8%–9%, creating a potential headwind.

Humana (NYSE:HUM - Get Free Report) issued its quarterly earnings results on Friday. The insurance provider reported ($0.70) EPS for the quarter, topping analysts' consensus estimates of ($1.00) by $0.30, FiscalAI reports. Humana had a net margin of 0.88% and a return on equity of 11.20%. The company had revenue of $41.16 billion for the quarter, compared to analyst estimates of $40.87 billion. During the same quarter in the previous year, the business earned $3.24 earnings per share. Humana's revenue was up 26.1% compared to the same quarter last year. Humana updated its FY 2026 guidance to 9.500- EPS.

Here are the key takeaways from Humana's conference call:

• Humana raised its 2026 adjusted EPS outlook to at least $9.50, from at least $9, citing cost trends at the lower end of its expected range and better-than-expected performance. The company said it remains on track to double individual Medicare Advantage pre-tax margin this year, excluding the STARS headwind.
• Early 2027 enrollment results are ahead of Humana’s expectations, and the company now anticipates membership growth, though it said it is too early to estimate the amount. Management expects meaningful individual MA margin improvement next year, supported in part by product pricing and operating changes.
• Humana reported a 4.17 member-weighted STARS rating for bonus year 2028, exceeding its top-quartile goal. It expects a one-time 2028 earnings tailwind, with some directed to investments and some potentially passed through to shareholders; the amount has not yet been quantified.
• Management expects medical cost trend to rise to 8%–9% in 2027, from 7%–8% in 2026, including 14%–15% growth in Part D costs tied to the health-technology pipeline. Humana said it has priced for the expected costs, but the higher trend remains a cost pressure.
• The new BlackRock joint venture is expected to improve balance-sheet efficiency, reducing Humana’s GAAP debt-to-cap ratio by about 130 basis points in the fourth quarter and eliminating the need to fund a previously expected 2027 clinic put option. Humana also expects about $900 million in pre-tax proceeds from the Gentiva divestment.

Humana Stock Up 5.1%

NYSE:HUM traded up $20.90 during trading hours on Friday, reaching $432.69. The company had a trading volume of 2,576,136 shares, compared to its average volume of 1,620,345. The company has a quick ratio of 1.74, a current ratio of 1.74 and a debt-to-equity ratio of 0.62. The firm has a market cap of $51.96 billion, a price-to-earnings ratio of 40.94, a P/E/G ratio of 2.53 and a beta of 0.65. The business's 50-day simple moving average is $403.96 and its two-hundred day simple moving average is $312.27. Humana has a twelve month low of $163.11 and a twelve month high of $456.50.

Humana Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, January 29th. Shareholders of record on Thursday, December 24th will be issued a $0.8850 dividend. This represents a $3.54 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, December 24th. Humana's dividend payout ratio (DPR) is presently 33.49%.

Analyst Ratings Changes

A number of equities research analysts have commented on the company. Deutsche Bank Aktiengesellschaft initiated coverage on Humana in a research report on Thursday, July 30th. They issued a "hold" rating on the stock. TD Cowen raised their price objective on Humana from $350.00 to $370.00 and gave the stock a "hold" rating in a research report on Friday, July 31st. Cantor Fitzgerald raised Humana from a "neutral" rating to an "overweight" rating and lifted their price objective for the stock from $300.00 to $460.00 in a research note on Wednesday, October 7th. Weiss Ratings upgraded Humana from a "hold (c-)" rating to a "hold (c)" rating in a report on Friday, August 14th. Finally, Truist Financial increased their target price on shares of Humana from $415.00 to $475.00 and gave the company a "hold" rating in a research report on Monday, October 12th. Twenty-one research analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, Humana has an average rating of "Moderate Buy" and a consensus price target of $458.96.

Trending Headlines about Humana

Here are the key news stories impacting Humana this week:

• Positive Sentiment: Humana reported a third-quarter loss of $0.70 per share, narrower than analysts’ expected $1.00 loss. Revenue rose 26.1% year over year to $41.16 billion, topping estimates. Article: HUM Q3 Earnings Beat Estimates on Strong Insurance Performance
• Positive Sentiment: The company raised its full-year 2026 adjusted EPS forecast to at least $9.50, above the roughly $9.13 consensus estimate. Reports cited lower-than-expected medical costs as a factor supporting the improved outlook. Article: Humana Raises 2026 Earnings Outlook
• Positive Sentiment: Humana expects Medicare Advantage membership to grow again in 2027, signaling continued expansion in a key business. Its CenterWell unit also helped drive the quarterly performance. Article: Humana Expects Another Year of Medicare Advantage Membership Growth
• Neutral Sentiment: Humana’s 2026 revenue guidance of $160 billion was below analysts’ $162.5 billion estimate, tempering the otherwise favorable earnings and outlook news. Article: Humana Third-Quarter Earnings
• Negative Sentiment: Despite beating estimates, Humana posted a loss compared with earnings of $3.24 per share a year earlier. Reports also noted that costs associated with new Medicare enrollees remain a concern. Article: Humana Profits Dip as Costs Rise from New Medicare Enrollees

Humana Company Profile

Humana Inc is a U.S. health and wellness company that provides health insurance and healthcare services. Its insurance offerings include Medicare Advantage, Medicare Supplement and prescription drug plans, as well as Medicaid and employer-sponsored plans.

The company also provides care through CenterWell, its healthcare services brand, which includes primary care, home health and pharmacy services. Its insurance and care offerings are available in markets across the United States, with availability varying by product and location.

Humana was founded in 1961 as a nursing home company and later expanded into health insurance.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.