Back to top

Image: Bigstock

Humana (HUM) to Report Q2 Earnings: What's in the Cards?

Read MoreHide Full Article

Humana Inc.’s (HUM - Free Report) second-quarter 2020 results are scheduled to be reported on Aug 5, 2020.

Factors to Impact Q2 Results

The to-be-reported quarter’s earnings report is likely to reflect better revenues. Notably, the consensus mark for revenues of $18.6 billion hints at a 14.6% rise from the prior-year reported number.

The company’s top line is likely to have witnessed an upside in the second quarter owing to higher premiums and its strong Medicaid and Medicare lines of businesses. The consensus mark for the company's total medical membership and total premiums suggests a hike of 2.1% and 15% each from the respective year-ago reported figures.

The Zacks Consensus Estimate for earnings is pegged at $10.34, indicating an increase of 71% from the year-ago reported figure.

The company is likely to have witnessed an uptick in its telehealth services as well.

On its last earnings call, management expected a disproportionate amount of 2020 earnings to heavily weigh on the company’s second-quarter performance from a seasonality perspective.

However, its specialty membership might have partially taken a hit from membership migration. The consensus mark for the same indicates an 8% decline from the prior-year reported figure.

Humana’s second-quarter earnings performance might also reflect on escalating growth-related investments.

Further, the company is expected to have faced weak utilization with the exception of pharmacy costs in the second quarter.

Additionally, total investment income for the to-be-reported quarter might have noticed a downtrend due to low investment yield. The consensus estimate for the same implies a 22.1% drop from the year-ago reported figure.

Moreover, the company’s performance is likely to have been dented by slow pharmacy use, muted contribution from Kindred, etc.

What the Quantitative Model States

Our proven model doesn’t predict an earnings beat for Humana this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Humana has an Earnings ESP of -2.62%. This is because the Most Accurate Estimate is pegged at $10.07, lower than the Zacks Consensus Estimate of $10.34.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Humana Inc. Price and EPS Surprise

Humana Inc. Price and EPS Surprise

Humana Inc. price-eps-surprise | Humana Inc. Quote

Zacks Rank: Humana currently carries a Zacks Rank #3, which increases the predictive power of ESP.

Highlights of Q1 Earnings and Surprise History

Humana's first-quarter 2020 operating earnings per share of $5.40 beat the Zacks Consensus Estimate by 11.6%. Moreover, the bottom line improved 20.5% year over year. This upside can primarily be attributed to higher revenues witnessed by the company.

The company boasts a stellar earnings record with its bottom line having delivered a surprise in all the trailing four quarters, the average being 10.1%.

Stocks to Consider

Here are a few stocks worth considering from the medical sector with the perfect mix of elements to beat on earnings this reporting cycle:

ACADIA Pharmaceuticals Inc. (ACAD - Free Report) is slated to announce second-quarter earnings on Aug 5. The stock has an Earnings ESP of +4.23% and is presently Zacks #3 Ranked.

bluebird bio, Inc. (BLUE - Free Report) is set to report second-quarter earnings on Aug 6. The stock is currently #3 Ranked and has an Earnings ESP of +69.17%.

Bausch Health Cos Inc. (BHC - Free Report) has an Earnings ESP of +4.62% and a Zacks Rank of 3 at present. The company is scheduled to release second-quarter earnings on Aug 6.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>