Humana Inc. HUM
Humana's first half of 2026 shows a credible margin recovery from a dismal 2025 — Q2 2026 operating income of $1.36B nearly doubled the $722M reported in Q2 2025, and the company has beaten EPS estimates in four consecutive quarters including a $7.61 actual versus $7.26 estimate in the latest report. However, the stock at $394.88 already trades at a PE of 37.05, a 43.6% premium to the peer median of 25.81, and sits well above its 200-day MA of $277.22, pricing in much of the recovery.
With FY2025 free cash flow having collapsed to $375M from $2.39B in 2024 and the announced Medicare Advantage plan cuts for 2027 creating near-term revenue uncertainty, the risk/reward is balanced rather than compelling at current levels.
What could go wrong
- Margin fragility. FY2025 operating margin of 1.12% and net margin of 0.92% leave virtually no buffer against medical cost ratio deterioration; any adverse claims trend could quickly erase the H1 2026 improvement.
- Valuation premium. At a PE of 37.05 versus a peer median of 25.81, the stock requires sustained earnings growth to justify its level; a single disappointing quarter could trigger a sharp de-rating.
- 2027 MA plan exits. Humana is cutting Medicare Advantage plans for 2027 with non-renewal letters arriving in early October, creating a revenue headwind and potential member attrition that could pressure top-line growth.
- Free cash flow collapse. FY2025 FCF of $375M is a fraction of the $2.39B generated in 2024 and $2.98B in 2023, limiting financial flexibility even as total debt rose to $12.94B.
What would change my mind
Where this comes from: quarterly_results · earnings_surprises · peer_relative · technicals. Orin's read on HUM; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All HUM filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $3.1B | 0.1% of fund |
| Vanguard Portfolio Management | $2.3B | 0.1% of fund |
| State Street | $2.2B | 0.1% of fund |
| Massachusetts Financial Services /Ma/ | $1.7B | 0.5% of fund |
| Eagle Capital Management | $1.5B | 4.7% of fund |
| Sessa Capital IM, L.P | $1.5B | 24.8% of fund |
99 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 93 Form 4 filings, net −$3.0M. Of the 50 on hand, 1 was an open-market purchase and 0 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about HUM
Orin answers questions about HUM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 35.7× | 23.1× | 26.4× |
| EV/EBITDA | 17.3× | 13.6× | — |
| P/S | 0.31× | 0.53× | — |
| P/B | 2.4× | 3.5× | — |
Its P/E sits above all 5 of the last 5 years (+6.07σ from its own mean).
32.7%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.4B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$419
$300 – $513 · +2% against today's price
- 16 buy or overweight
- 27 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| HUMHumana Inc. | $46B | 35.7× | 17.3× | 13.7% | 0.9% | 7% |
| AAgilent Technologies, Inc. | $49B | 34.0× | 25.9× | 53.7% | 19.5% | 20% |
| CNCCentene Corporation | $31B | — | — | 16.1% | -2.6% | -24% |
| GEHCGE HealthCare Technologies Inc. | $30B | 19.1× | 10.9× | 42.9% | 7.9% | 15% |
| IQVIQVIA Holdings Inc. | $45B | 33.8× | 16.9× | 26.2% | 8.1% | 22% |
| MTDMettler-Toledo International Inc. | $31B | 34.1× | 25.1× | 58.4% | 21.9% | -1200% |
| RMDResMed Inc. | $32B | 21.3× | 14.7× | 61.2% | 26.9% | 24% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 5.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $730 | $368.12 · +98% | 2026-06-10 |
| Levered DCF | $506 | $368.12 · +37% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.