HUM logo

Humana Inc

HUM
—

Build a strategy around HUM

Accountable AI Logo

Humana Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-08

Snapshot

  • Goodwill of 9.6B is 52% of equity - acquisition-heavy model creates impairment risk if Medicare Advantage margins compress further.[Goodwill]
  • EPS declined 36% over 3Y and 27% over 5Y despite 126B TTM revenue - margin erosion outpacing scale benefits.[EPS Growth 3Y]
  • Accounts payable of 15.6B exceeds receivables of 2.7B by 5.8x - negative working capital funds operations interest-free.[Accounts Payable]

Watch Triggers

  • Net Margin TTM: Falls below 0.5% or rises above 1.5% — At 126B revenue, each 0.5% margin change = 630M net income swing (50% of current)
  • Goodwill: Impairment charge announced — 9.6B goodwill is 52% of equity; write-down would crater book value and signal M&A failure
  • Free Cash Flow TTM: Drops below 1B or exceeds 2.5B — Current 1.5B FCF barely covers 430M dividends plus debt service; deterioration limits optionality

Bull Case

P/E of 23x vs industry median 35x and P/S of 0.24x vs 1.5x median suggests deep value if margins stabilize at current 1% level.

PE RatioPS Ratio

Asset turnover of 2.5x vs industry 0.8x demonstrates capital-light model; 126B revenue on 50B assets generates FCF despite thin margins.

Asset Turnover TTMFree Cash Flow TTM

Bear Case

ROIC of 4.2% on 31B invested capital destroys value if cost of capital exceeds 6-7%; 12.6B debt at rising rates compounds pressure.

ROIC TTMTotal Debt

EPS declining 27-36% over 3-5Y while revenue grows indicates structural margin compression, not cyclical weakness.

EPS Growth 5YEPS Growth 3Y

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

Leverage HUM's top insights and create a custom strategy based on them in seconds. Our AI editor does it all — in one click.

Take Me to The Editor

Forward Thesis

Net margin likely to remain compressed at ~1% as Medicare Advantage cost trends persist through 2026.

1-3ymed
  • Rising medical costs outpacing rate increases
  • Star ratings pressure on bonus payments
  • Limited pricing power in government programs
Net margin TTM 1.0% vs industry median 0.1%EPS 3Y CAGR -36% signals structural pressureROIC 4.2% barely covers cost of capital

Valuation Context

Caveats

Public Strategies Rankings

See how Humana Inc ranks across different investment strategies.

Leverage HUM's top insights and create a custom strategy in seconds. Our AI editor does it all — in one click.

Data Partners
Morningstar Logo

Fundamental company data provided by Morningstar, updated daily.

Accountable Finance, Inc. Disclaimer
accountable.finance is not operated by a broker or a dealer. Under no circumstances does any information posted on accountable.finance represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. In no event shall accountable.finance be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on accountable.finance, or relating to the use of, or inability to use, accountable.finance or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. Stock quotes and fundamental company data provided by Morningstar, updated daily.
Accountable Logo
© 2026 Accountable Finance, Inc. All rights reserved.