HUM
Humana Inc.$183.11
Buy
Target $286.00
Report: Mar 11, 2026Healthcare • Medical - Healthcare Plans • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$183.11+56.2%
Rec: BuyConviction: Medium
Entry Target
$183.11
(0% above current)
Fair Value
$286.00
(56% above current)
Stop Loss
$169.61
(7% below current)
Position Size
Half
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$315.35
52 Week Low$163.11
Avg. 3 Month Volume1.99M
Efficiency
LTM Gross Margin14.5%
LTM EBITDA Margin2.2%
LTM EBIT Margin1.6%
LTM Operating Margin2.1%
LTM ROA2.4%
LTM ROE6.6%
LTM ROIC6.5%
LTM ROCE6.4%
Capital Structure
Market Cap (MM)$20.9B
Enterprise Value (MM)$29.4B
Shares Outstanding120.60M
Total Debt (MM)$12.68B
Cash & Equivalents (MM)$4.20B
LTM Net Debt (MM)$8.47B
LTM Net Debt/EBITDA2.9x
Growth
TTM Rev. Growth10.1%
Last 3-Yr Rev. CAGR11.8%
Last 3-Yr EBITDA CAGR-15.6%
Last 3-Yr EPS CAGR-23.7%
Valuation
Street Target Price$235.00
LTM EV/Revenue0.2x
LTM EV/Gross Profit1.6x
LTM EV/EBIT14.2x
LTM EV/EBITDA10.2x
LTM P/E17.6x
LTM EV/FCF73.8x
LTM P/FCF52.5x
LTM P/TB0.5x
LTM P/B1.2x
Dividend Yield2.0%
Payout Ratio35.9%
Executive SummarySituation: Current price is $183.11 versus fair value $286.0 (56.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Recovery of Medicare Advantage Star Ratings to 4-star or higher for the majority of members. Bear case centers on Persistent medical cost inflation (MLR pressure) exceeding premium increases. Conclusion: Recommendation is Buy with Half sizing and Long-Term horizon.
Bull Case
1. CenterWell services revenue grew 31.6% YoY, providing a high-margin offset to insurance volatility. 2. Management's margin-over-membership strategy is expected to double individual MA margins on a Star-normalized basis by 2026. 3. Institutional conviction is high, with a net inflow of 7.2 million shares in Q4 2025.
Bear Case
1. Medical loss ratios (MLR) have surged to 90.4%, threatening dividend sustainability and earnings power. 2. Persistent Star Rating headwinds could delay margin recovery beyond 2028. 3. Regulatory dependency remains extreme, with CMS rate notices acting as a binary risk factor.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Recovery of Medicare Advantage Star Ratings to 4-star or higher for the majority of members. This is critical because it unlocks approximate...
Near-Term (0-6 months)Impact: High
Successful expansion of CenterWell services into new Medicaid markets and the realization of $100 million in AI-driven cost savings. This va...
Long-Term (18+ months)Impact: Moderate
Humana is relevant for analysis now because it is trading at a multi-year low despite strong institutional buying and a clear, management-le...
Primary Risks
Concern: High
Persistent medical cost inflation (MLR pressure) exceeding premium increases. This mechanism impairs the company's pricing power and permane...
Concern: Medium
Regulatory disruption from CMS, including further rate cuts or changes to the risk adjustment model (v28). This could permanently impair the...
Concern: Medium
The governance outcome tree presents three paths: 1. Status Quo: Management successfully executes the 3% margin recovery plan by 2027, leadi...
Recent Activity
2025-12-16SEC Filing (8-K)
-6.03%Humana announces insurance leadership transition
2025-11-05SEC Filing (8-K)
-6.01%Humana reports Q3 2025 earnings with adjusted EPS of $3.24, revises full-year GAAP guidance downward while affirming adjusted guidance.
2025-10-03SEC Filing (8-K)
+10.56%Humana reports 2Q25 earnings and raises full year guidance
2025-07-30SEC Filing (8-K)
+12.40%Humana reports 2Q25 earnings and raises full year guidance
2025-04-18SEC Filing (8-K)
-7.02%Humana 2025 annual meeting approves director elections and proposals
Valuation Table
7.9/10Decision Grade
Scenario Range
$349
Bear
$500
Base
$594
Bull
$183