Humana (HUM): Assessing Valuation as Shares Slide 14% Over the Past Month

Humana (HUM) shares have faced headwinds in recent months, with the stock down about 14% over the past month. Investors are watching as the healthcare provider navigates ongoing industry challenges and looks to regain momentum.

See our latest analysis for Humana.

After a tough stretch, Humana's momentum is clearly fading, with a 1-year total shareholder return of -14.4% and a share price that is trending lower in the short run. Recent slides have added to a much steeper three-year total return decline, reflecting shifting investor sentiment around healthcare’s risk and reward outlook.

If you're watching trends unfold in healthcare, it's a great moment to discover See the full list for free.

With shares trading well below analyst targets and a significant multi-year decline, is Humana undervalued at these levels, or is the market factoring in every risk and pricing in all future growth?

Most Popular Narrative: 19.3% Undervalued

Humana's widely followed narrative places its fair value at $295.38, notably higher than the most recent close of $238.42. This sizable gap draws investor attention as the narrative highlights financial and operational drivers behind the optimism.

The analysts have a consensus price target of $298.955 for Humana based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $353.0, and the most bearish reporting a price target of just $250.0.

Read the complete narrative.

Want to know the bold math behind these targets? The fair value rests on a carefully balanced set of assumptions about future revenue growth, expanding profit margins, and where multiples might land years from now. Only by reading the full narrative will you see which specific forecasts tip the scale in favor of Humana's upside, or test your own expectations against the consensus.

Result: Fair Value of $295.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory setbacks in Medicare Advantage ratings and rising ACA premiums could put pressure on Humana's growth story in the near term.

Find out about the key risks to this Humana narrative.

Build Your Own Humana Narrative

If you want to see the numbers your own way or question what you’ve just read, you can craft a personalized narrative in just minutes. Do it your way

A great starting point for your Humana research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Set yourself up for success by acting on timely stock ideas tailored to your interests. Don’t let standout opportunities pass you by.

• Capture the potential of generous payouts by reviewing these 16 dividend stocks with yields > 3%, which combine strong yields with robust financial health.
• Tap into tomorrow’s tech breakthroughs and gain an edge by analyzing these 24 AI penny stocks, which are reshaping everything from security to automation.
• Find companies trading well below their intrinsic value and seize your chance with these 874 undervalued stocks based on cash flows before others catch on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com