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Factors to Note Ahead of Humana (HUM) Q2 Earnings Release
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Humana Inc. (HUM - Free Report) is scheduled to report second-quarter 2022 results on Jul 27, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Humana’s second-quarter earnings per share is pegged at $7.67, which indicates an improvement of 11.3% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $23.4 billion, suggesting a 13.3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Humana boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 5.94%. This is depicted in the chart below:
Revenues of Humana are likely to have benefited from higher premiums from its well-performing Medicare and Medicaid businesses in the second quarter. Premiums of these businesses might have witnessed an uptick in the to-be-reported quarter from numerous contract wins from different state authorities and growing membership.
The Zacks Consensus Estimate for HUM’s second-quarter premiums from its Medicare business is pegged at $18.8 billion, which indicates growth of 10.2% from the prior-year quarter’s reported figure. The consensus mark for Medicaid and other premiums stands at $1.5 billion, which suggests a 19.8% rise from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for total medical membership of Humana is pegged at 17.1 million, suggesting 0.8% growth from the prior-year quarter’s reported figure.
Strong contributions by the Retail and Healthcare Services segments of Humana are expected to have contributed to the overall top-line growth in the second quarter. The Retail segment might have been driven by higher individual Medicare Advantage membership growth coupled with increased per member individual Medicare Advantage premiums. The consensus mark for the segment’s premiums in the second quarter stands at $20.5 billion, which indicates an improvement of 10.8% from the year-ago quarter’s reported figure.
Meanwhile, continued growth in the pharmacy business and increased mail-order pharmacy penetration by retained members are likely to have favored the performance of the Healthcare Services segment in the to-be-reported quarter.
However, a decline in fully-insured commercial medical and ASO commercial membership might have hurt the Group and Specialty segment. The Zacks Consensus Estimate for both the membership metrics shows a decline of 13.7% and 10.2%, respectively, from the prior-year quarter’s reported numbers.
Humana’s continuous investments aimed at automating processes and digital advancements are likely to have boosted operational efficiencies in the second quarter. These investments might have resulted in escalating costs, which in turn, is expected to have weighed on the margins of HUM in the quarter to be reported.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Humana this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Humana has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
While an earnings beat looks uncertain for Humana, here are some companies from the Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for second-quarter 2022 earnings of Alcon stands at $2.41, suggesting growth of 12.1% from the prior-year quarter’s reported figure.
ALC beat earnings estimates in each of the trailing four quarters.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +29.26% and a Zacks Rank #2. The Zacks Consensus Estimate for BioMarin Pharmaceutical’s second-quarter 2022 earnings is pegged at $1.96 per share, which indicates a rise 47.4% from the prior-year quarter’s reported figure.
BMRN beat earnings estimates in each of the trailing four quarters.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +9.15% and a Zacks Rank of 3. The Zacks Consensus Estimate for DexCom’s second-quarter 2022 earnings is pegged at 76 cents per share, indicating an improvement of 13.4% from the year-ago quarter’s reported figure.
DXCM beat earnings estimates in two of the trailing four quarters and missed twice.
Image: Bigstock
Factors to Note Ahead of Humana (HUM) Q2 Earnings Release
Humana Inc. (HUM - Free Report) is scheduled to report second-quarter 2022 results on Jul 27, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for Humana’s second-quarter earnings per share is pegged at $7.67, which indicates an improvement of 11.3% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $23.4 billion, suggesting a 13.3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Humana boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 5.94%. This is depicted in the chart below:
Humana Inc. Price and EPS Surprise
Humana Inc. price-eps-surprise | Humana Inc. Quote
Factors to Note
Revenues of Humana are likely to have benefited from higher premiums from its well-performing Medicare and Medicaid businesses in the second quarter. Premiums of these businesses might have witnessed an uptick in the to-be-reported quarter from numerous contract wins from different state authorities and growing membership.
The Zacks Consensus Estimate for HUM’s second-quarter premiums from its Medicare business is pegged at $18.8 billion, which indicates growth of 10.2% from the prior-year quarter’s reported figure. The consensus mark for Medicaid and other premiums stands at $1.5 billion, which suggests a 19.8% rise from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for total medical membership of Humana is pegged at 17.1 million, suggesting 0.8% growth from the prior-year quarter’s reported figure.
Strong contributions by the Retail and Healthcare Services segments of Humana are expected to have contributed to the overall top-line growth in the second quarter. The Retail segment might have been driven by higher individual Medicare Advantage membership growth coupled with increased per member individual Medicare Advantage premiums. The consensus mark for the segment’s premiums in the second quarter stands at $20.5 billion, which indicates an improvement of 10.8% from the year-ago quarter’s reported figure.
Meanwhile, continued growth in the pharmacy business and increased mail-order pharmacy penetration by retained members are likely to have favored the performance of the Healthcare Services segment in the to-be-reported quarter.
However, a decline in fully-insured commercial medical and ASO commercial membership might have hurt the Group and Specialty segment. The Zacks Consensus Estimate for both the membership metrics shows a decline of 13.7% and 10.2%, respectively, from the prior-year quarter’s reported numbers.
Humana’s continuous investments aimed at automating processes and digital advancements are likely to have boosted operational efficiencies in the second quarter. These investments might have resulted in escalating costs, which in turn, is expected to have weighed on the margins of HUM in the quarter to be reported.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Humana this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Humana has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HUM currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for Humana, here are some companies from the Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for second-quarter 2022 earnings of Alcon stands at $2.41, suggesting growth of 12.1% from the prior-year quarter’s reported figure.
ALC beat earnings estimates in each of the trailing four quarters.
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +29.26% and a Zacks Rank #2. The Zacks Consensus Estimate for BioMarin Pharmaceutical’s second-quarter 2022 earnings is pegged at $1.96 per share, which indicates a rise 47.4% from the prior-year quarter’s reported figure.
BMRN beat earnings estimates in each of the trailing four quarters.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +9.15% and a Zacks Rank of 3. The Zacks Consensus Estimate for DexCom’s second-quarter 2022 earnings is pegged at 76 cents per share, indicating an improvement of 13.4% from the year-ago quarter’s reported figure.
DXCM beat earnings estimates in two of the trailing four quarters and missed twice.
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