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Humana (HUM) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Humana (HUM - Free Report) closed at $428.44, marking a +1.24% move from the previous day. This move outpaced the S&P 500's daily gain of 0.22%. Elsewhere, the Dow lost 0.13%, while the tech-heavy Nasdaq added 0.2%.

Coming into today, shares of the health insurer had lost 2.03% in the past month. In that same time, the Medical sector lost 4.09%, while the S&P 500 lost 8.32%.

Humana will be looking to display strength as it nears its next earnings release. In that report, analysts expect Humana to post earnings of $7.67 per share. This would mark year-over-year growth of 11.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.39 billion, up 13.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $24.65 per share and revenue of $93.09 billion, which would represent changes of +19.43% and +12.08%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Humana. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Humana is currently a Zacks Rank #3 (Hold).

In terms of valuation, Humana is currently trading at a Forward P/E ratio of 17.17. This valuation marks a premium compared to its industry's average Forward P/E of 15.38.

We can also see that HUM currently has a PEG ratio of 1.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.1 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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