Humana (HUM): Revisiting Valuation After Recent Share Price Weakness

Humana (HUM) has been under quiet pressure lately, with the stock down around 13% over the past month and more than 20% in the past 3 months, prompting fresh questions about valuation.

See our latest analysis for Humana.

Zooming out, that recent 30 day share price return of minus 13.02 percent and the roughly minus 22.44 percent 90 day share price return sit against a tough backdrop, with a 12 month total shareholder return of minus 15.72 percent and a three year total shareholder return deeper in the red. This suggests momentum has clearly been fading even as Humana continues to post solid underlying growth.

If this kind of healthcare volatility has you rethinking concentration risk, it might be a good moment to explore other opportunities across healthcare stocks for fresh ideas.

Against that backdrop, Humana now trades well below analyst targets and its own estimated intrinsic value, yet continues to grow revenue and earnings. This raises a key question for investors: is this genuine mispricing, or is future growth already fully reflected?

Most Popular Narrative: 16% Undervalued

Compared to Humana’s last close at $241.96, the most followed narrative sees fair value materially higher, framing recent price weakness as a potential disconnect.

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.

Curious how modest revenue growth, expanding margins and a lower future earnings multiple can still justify a meaningfully higher value than today’s price? The narrative breaks down a detailed earnings ramp, embeds disciplined assumptions about profitability, and then discounts it all back with a precise required return. Want to see which combination of operating leverage and valuation reset underpins that upside case?

Result: Fair Value of $286.63 (UNDERVALUED)

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

However, ongoing legal setbacks on Medicare bonus cuts, as well as uncertainty around future Medicare Advantage and Medicaid reimbursement, could easily derail that upside scenario.

Find out about the key risks to this Humana narrative.

Another View: Market Multiples Tell a Different Story

While the narrative model sees Humana as meaningfully undervalued, the market’s own pricing is less generous. Shares trade on a 22.5x earnings multiple, slightly richer than the US Healthcare sector at 22.1x, but cheaper than peers at 24.2x and well below a 40.2x fair ratio estimate. Is this a cautious market or a lingering opportunity?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Humana Narrative

If you see things differently or would rather dig into the numbers yourself, you can quickly build your own view in just a few minutes, Do it your way.

A great starting point for your Humana research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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