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Here's Why You Should Retain Humana (HUM) in Your Portfolio
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Humana Inc. (HUM - Free Report) gains on growing premium revenues, strength in Medicaid and Medicare plans, numerous acquisitions, and robust cash reserves. A solid 2023 business outlook acts as a tailwind for the stock.
Zacks Rank & Price Performance
Humana currently carries a Zacks Rank #3 (Hold).
The stock has gained 16.8% in a year compared with the industry’s 0.09% growth. The Zacks Medical sector has declined 8.4% against the S&P 500 composite's growth of 8% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
HUM is well-poised for progress, as evidenced by its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Humana’s 2023 earnings is pegged at $28.24 per share, indicating an improvement of 11.9% from the year-earlier reading, while the same for revenues stands at $102.3 billion, implying an 10.2% increase from the prior year's actual.
The consensus mark for 2024 earnings is pegged at $31.98 per share, suggesting 13.3% growth from the 2023 estimate. The same for revenues stands at $110.8 billion, which indicates a rise of 8.2% from the 2023 estimate.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 earnings has been revised upward by 0.6% in the past 30 days.
Impressive Earnings Surprise History
Humana boasts a strong earnings surprise record. It has surpassed earnings estimates in each of the trailing four quarters, the average surprise being 8.87%.
A Favorable 2023 Outlook
HUM anticipates revenues of $104.4-$106.4 billion for 2023, the mid-point of which indicates 13.5% growth from the 2022 reported figure.
Adjusted earnings per share are estimated to be $28.25, which suggests 11.9% growth from the 2022 reported figure.
Business Tailwinds
The top line of Humana benefits on the back of higher premiums and an expanding customer base across its Medicaid and Medicare businesses. Through these businesses, HUM devises affordable health plans and forays deeper into several U.S. communities.
The health insurer often resorts to collaborations with well-reputed organizations to launch plans or upgrade features within the existing ones. The strength of such plans continues to fetch numerous contract wins and renewed agreements with Humana from federal or state authorities.
In May 2023, HUM collaborated with two national organizations to offer its Humana Medicare Advantage HMO members access to Durable Medical Equipment services in the comfort of their homes.
An aging U.S. population is likely to sustain the solid demand for the Medicare plans of Humana. Management estimates individual Medicare Advantage membership to witness minimum membership growth of 775,000 in 2023.
A series of acquisitions undertaken over the years, including those of Family Physicians Group, Curo, Enclara, iCare and Inclusa, has boosted the capabilities, diversified income streams and extended the nationwide presence of Humana. Also, the company does not shy away from divesting underperforming businesses in a bid to improve operational efficiencies and intensify focus on core units.
HUM boasts a solid cash position through which it can effectively service its short-term debt obligations. As of Mar 31, 2023, its cash and cash equivalents of $13.7 billion were way higher than the short-term debt of $1.9 billion. Robust cash-generating abilities equip the health insurer to pursue uninterrupted business investments or tactically deploy capital via share buybacks and dividend hikes. In the first quarter of 2023, operating cash flows increased more than 22-fold year over year.
ICU Medical’s earnings surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 9.49%. The Zacks Consensus Estimate for ICUI’s 2023 earnings indicates a rise of 7.3% from the year-ago actual, while the same for revenues suggests an improvement of 1.3%. The consensus mark for ICUI’s 2023 earnings has moved 7.3% north in the past 30 days.
The bottom line of IRadimed beat estimates in each of the trailing four quarters, the average beat being 11.92%. The Zacks Consensus Estimate for IRMD’s 2023 earnings indicates a rise of 19.1% from the prior-year actual, while the same for revenues suggests an improvement of 18.8%. The consensus mark for IRMD’s 2023 earnings has moved 0.8% north in the past 30 days.
Merit Medical Systems’ earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.22%. The Zacks Consensus Estimate for MMSI’s 2023 earnings indicates a rise of 7% from the year-ago actual, while the same for revenues suggests an improvement of 6.2%. The consensus mark for MMSI’s 2023 earnings has moved 1.4% north in the past 30 days.
Shares of ICU Medical, IRadimed and Merit Medical Systems have gained 6.3%, 46.1% and 44.1%, respectively, in a year.
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Here's Why You Should Retain Humana (HUM) in Your Portfolio
Humana Inc. (HUM - Free Report) gains on growing premium revenues, strength in Medicaid and Medicare plans, numerous acquisitions, and robust cash reserves. A solid 2023 business outlook acts as a tailwind for the stock.
Zacks Rank & Price Performance
Humana currently carries a Zacks Rank #3 (Hold).
The stock has gained 16.8% in a year compared with the industry’s 0.09% growth. The Zacks Medical sector has declined 8.4% against the S&P 500 composite's growth of 8% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
HUM is well-poised for progress, as evidenced by its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Humana’s 2023 earnings is pegged at $28.24 per share, indicating an improvement of 11.9% from the year-earlier reading, while the same for revenues stands at $102.3 billion, implying an 10.2% increase from the prior year's actual.
The consensus mark for 2024 earnings is pegged at $31.98 per share, suggesting 13.3% growth from the 2023 estimate. The same for revenues stands at $110.8 billion, which indicates a rise of 8.2% from the 2023 estimate.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 earnings has been revised upward by 0.6% in the past 30 days.
Impressive Earnings Surprise History
Humana boasts a strong earnings surprise record. It has surpassed earnings estimates in each of the trailing four quarters, the average surprise being 8.87%.
A Favorable 2023 Outlook
HUM anticipates revenues of $104.4-$106.4 billion for 2023, the mid-point of which indicates 13.5% growth from the 2022 reported figure.
Adjusted earnings per share are estimated to be $28.25, which suggests 11.9% growth from the 2022 reported figure.
Business Tailwinds
The top line of Humana benefits on the back of higher premiums and an expanding customer base across its Medicaid and Medicare businesses. Through these businesses, HUM devises affordable health plans and forays deeper into several U.S. communities.
The health insurer often resorts to collaborations with well-reputed organizations to launch plans or upgrade features within the existing ones. The strength of such plans continues to fetch numerous contract wins and renewed agreements with Humana from federal or state authorities.
In May 2023, HUM collaborated with two national organizations to offer its Humana Medicare Advantage HMO members access to Durable Medical Equipment services in the comfort of their homes.
An aging U.S. population is likely to sustain the solid demand for the Medicare plans of Humana. Management estimates individual Medicare Advantage membership to witness minimum membership growth of 775,000 in 2023.
A series of acquisitions undertaken over the years, including those of Family Physicians Group, Curo, Enclara, iCare and Inclusa, has boosted the capabilities, diversified income streams and extended the nationwide presence of Humana. Also, the company does not shy away from divesting underperforming businesses in a bid to improve operational efficiencies and intensify focus on core units.
HUM boasts a solid cash position through which it can effectively service its short-term debt obligations. As of Mar 31, 2023, its cash and cash equivalents of $13.7 billion were way higher than the short-term debt of $1.9 billion. Robust cash-generating abilities equip the health insurer to pursue uninterrupted business investments or tactically deploy capital via share buybacks and dividend hikes. In the first quarter of 2023, operating cash flows increased more than 22-fold year over year.
Stocks to Consider
Some better-ranked stocks in the Medical space include ICU Medical, Inc. (ICUI - Free Report) , IRadimed Corporation (IRMD - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) . ICU Medical currently sports a Zacks Rank #1 (Strong Buy), and IRadimed and Merit Medical Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ICU Medical’s earnings surpassed estimates in three of the last four quarters and missed the mark once, the average surprise being 9.49%. The Zacks Consensus Estimate for ICUI’s 2023 earnings indicates a rise of 7.3% from the year-ago actual, while the same for revenues suggests an improvement of 1.3%. The consensus mark for ICUI’s 2023 earnings has moved 7.3% north in the past 30 days.
The bottom line of IRadimed beat estimates in each of the trailing four quarters, the average beat being 11.92%. The Zacks Consensus Estimate for IRMD’s 2023 earnings indicates a rise of 19.1% from the prior-year actual, while the same for revenues suggests an improvement of 18.8%. The consensus mark for IRMD’s 2023 earnings has moved 0.8% north in the past 30 days.
Merit Medical Systems’ earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.22%. The Zacks Consensus Estimate for MMSI’s 2023 earnings indicates a rise of 7% from the year-ago actual, while the same for revenues suggests an improvement of 6.2%. The consensus mark for MMSI’s 2023 earnings has moved 1.4% north in the past 30 days.
Shares of ICU Medical, IRadimed and Merit Medical Systems have gained 6.3%, 46.1% and 44.1%, respectively, in a year.