Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 17 Dec, 25 | HUM | Buy | USD 258.16 | USD 271.0 | USD 290.0 | 40 days | Closed |
2.12%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Humana Inc., together with its subsidiaries, operates as a health and well-being company in the United States. It operates through two segments, Insurance and CenterWell. The company offers medical and supplemental benefit plans to individuals. It also has a contract with Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program; and contracts with various states to provide Medicaid, dual eligible, and long-term support services benefits. In addition, the company provides commercial fully insured medical and specialty health insurance benefits comprising dental, vision, life insurance, and other supplemental health benefits, as well as administrative services only products to individuals and employer groups; military services, such as TRICARE T2017 East Region contract; and engages in the operations of PBM business. Further, it offers pharmacy solutions, provider services, and home solutions services, such as home health and other services to its health plan members, as well as to third parties. Humana Inc. was founded in 1961 and is headquartered in Louisville, Kentucky.
Revenue Expansion: In Q3 FY25, consolidated revenues increased to USD 32.6 billion, up from USD 29.4 billion in Q3 FY24
CenterWell Primary Care Growth: As of Q3 FY25, CenterWell Primary Care added 56,600 patients, reflecting nearly 15% growth versus December 31, 2024
Higher Medical Benefit Ratio: The Insurance segment benefit ratio increased to 91.1% in Q3 FY25, compared with 89.9% in Q3 FY24
Decline in Earnings: In Q3 FY25, net income attributable to Humana declined to USD 195 million, compared with USD 480 million in Q3 FY24
Humana’s earnings outlook remains sensitive to sustained pressure from Medicare Advantage membership volatility, elevated medical cost trends, regulatory changes affecting reimbursement, and execution risk associated with large-scale operational and clinical transformation initiatives
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 258.16 | 225.0 | 271.0 | 290.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue Growth and Business Mix: Humana reported solid top-line growth in the third quarter of FY25, with consolidated revenues increasing to USD 32.6 billion, compared with USD 29.4 billion in Q3 FY24. The growth was primarily supported by higher per-member Medicare premiums, driven in part by Inflation Reduction Act subsidies, alongside continued expansion in state-based contracts and stand-alone prescription drug plans. These gains were partially offset by a deliberate reduction in individual Medicare Advantage membership following exits from unprofitable plans and counties.
Profitability and Earnings Performance: Operating income declined year over year to USD 400 million from USD 728 million, reflecting elevated operating costs and higher medical benefit expenses. Net income attributable to Humana decreased to USD 195 million, down from USD 480 million in the prior-year quarter, resulting in diluted EPS of USD 1.62, compared with USD 3.98 in Q3 FY24. The decline largely reflected higher investment spending, value creation initiative charges, and a loss on the sale of a non-core business.
Medical Cost Trends and Benefit Ratio: The Insurance segment benefit ratio increased to 91.1% in Q3 FY25 from 89.9% in Q3 FY24. This increase reflected business mix shifts toward higher-benefit-ratio lines, incremental investments to improve clinical and member outcomes, and changes in Medicare Part D seasonality under the Inflation Reduction Act. These pressures were partially offset by favorable prior-period medical claims reserve development during the quarter.
Operating Cost Structure and Efficiency Initiatives: Humana’s consolidated operating cost ratio rose to 12.6% from 11.5% in the prior year, reflecting reduced operating leverage from lower individual Medicare Advantage membership and charges related to enterprise-wide value creation initiatives. These initiatives included workforce optimization and consulting spend, aimed at supporting long-term productivity and operational efficiency, with expected benefits accruing over future periods.
Membership and Operational Execution: While individual Medicare Advantage membership declined year to date, management reported improved retention and better-than-expected sales trends, leading to a revised FY25 membership decline outlook of approximately 425,000 members, improved from prior expectations of up to 500,000. Medicaid operations continued to perform in line with expectations, and early indicators from the Annual Election Period suggested improving sales quality and channel mix.
CenterWell and Healthcare Services Expansion: CenterWell continued to deliver strong operational momentum, with primary care patient growth of approximately 56,600, representing nearly 15% growth versus December 2024. CenterWell Pharmacy also posted strong specialty and direct-to-consumer growth, exceeding internal expectations and reinforcing Humana’s strategy to expand care delivery and services capabilities alongside its insurance platforms.
Balance Sheet and Liquidity Position: Humana maintained a solid balance sheet, with total assets increasing to USD 49.7 billion at September 30, 2025, from USD 46.5 billion at year-end 2024. Cash and cash equivalents rose to USD 5.4 billion, supported by positive operating cash flows, while days in claims payable declined to 33.2 days, reflecting improved claims processing timing rather than changes in reserve adequacy.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Humana Inc. (NYSE: HUM) at the closing market price of USD 258.16, as on Dec 16, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Healthcare Plans
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | |
|---|---|---|---|---|---|---|---|---|
| HUM Humana Inc |
-1.35 0.37% | 360.65 | 19.16 | 14.60 | 0.56 | 3.37 | 0.53 | |
| UNH UnitedHealth Group Incorporated |
1.43 0.36% | 400.96 | 22.57 | 18.38 | 1.33 | 5.65 | 1.38 | 13.97 |
| CVS CVS Health Corp |
-0.84 0.85% | 98.32 | 55.65 | 10.80 | 0.25 | 1.32 | 0.42 | 17.09 |
| CI Cigna Corp |
-5.82 2.04% | 279.27 | 12.47 | 9.12 | 0.27 | 1.75 | 0.35 | |
| ELV Elevance Health Inc |
-2.77 0.71% | 388.50 | 13.02 | 12.47 | 0.36 | 1.60 | 0.47 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on December 17, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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