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Here's Why Investors Should Hold Humana (HUM) Stock for Now
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Humana Inc. (HUM - Free Report) is aided by an expanding membership base, a robust 2023 business outlook, buyouts and collaborations, and a notable financial position.
Zacks Rank & Price Performance
Humana currently carries a Zacks Rank #3 (Hold).
The stock has gained 4.5% in the past three months compared with the industry’s 12.2% rise. The Zacks Medical sector has dipped 5.8% against the S&P 500 Composite’s gain of 0.9% in the same time frame.
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Favorable Style Score
HUM boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Robust Growth Prospects
The Zacks Consensus Estimate for Humana’s 2023 earnings is pegged at $28.29 per share, suggesting growth of 12.1% from the prior-year reported figure. The consensus mark for 2024 earnings is pegged at $31.42 per share, indicating an improvement of 11.1% from the prior-year estimate.
Impressive Earnings Surprise History
HUM’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 5.5%.
Strong 2023 Outlook
Management forecasts adjusted revenues to be within $100.7-$102.7 billion this year, the midpoint of which suggests 9.4% growth from the 2022 figure.
Adjusted earnings per share are anticipated to be a minimum of $28.25 in 2023, which indicates an improvement of 11.9% from the 2022 level.
Key Drivers
Humana gains on the back of an expanding customer base, which it earns through distributing cost-effective health insurance plans across different U.S. communities and making efforts to upgrade such plan offerings from time to time. Humana recently announced its Medicare Advantage plans for 2024, aiming to expand to 39 new counties in 2024. Overall, its Medicare HMO offerings are targeted to reach 140 counties in 2024, while its Medicare LPPO plans are likely to be available across 80 counties in the same time frame.
The strength of these plans should fetch numerous contract wins and renewed agreements from federal or state authorities. An increase in membership fetches the resultant benefit of improved premiums, the most significant contributor to a health insurer’s top line.
An aging U.S. population is likely to sustain the solid demand for Humana’s Medicare plans. Management expects individual Medicare Advantage membership will witness a minimum membership growth of 860,000 in 2023. In order to cater more effectively to the aging population, HUM has the CenterWell brand in place.
This August, the health insurer introduced the CenterWell Primary Care Anywhere program to provide enhanced primary care to seniors at home across specific Louisiana and Georgia locations. In November 2023, CenterWell announced its expansion plans across Indiana, which will help the brand solidify its presence in the region.
A series of acquisitions undertaken over the years have enhanced Humana’s capabilities, diversified income streams, expanded its global presence and widened its customer base. HUM often resorts to collaborations with well-reputed organizations to launch new plans or upgrade features within the existing ones. In October 2023, Humanapartnered with Denver Health to offer enhanced care access and convenience for its Medicare Advantage customer base across the Denver area.
Humana boasts a solid cash position and cash-generating abilities, with the support of which it can undertake uninterrupted growth-related initiatives. As of Sep 30, 2023, its cash and cash equivalents of $15.1 billion were way higher than the short-term debt of $2.2 billion. In the first nine months of 2023, HUM generated operating cash flows of $11.1 billion, which increased 14.4% year over year.
The bottom line of Integer Holdings surpassed estimates in each of the last four quarters, the average surprise being 12%. The Zacks Consensus Estimate for ITGR’s 2023 earnings and revenues indicates 18.6% and 14.9% growth, respectively, from their corresponding prior-year actuals.
Centene Corporation’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 5.6%. The Zacks Consensus Estimate for CNC’s 2023 earnings and revenues indicates 15.2% and 4.4% growth, respectively, from the prior-year actuals.
DexCom’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 36.4%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a rise of 64.4%, while the consensus mark for revenues suggests an improvement of 23.5% from the corresponding year-ago reported figures.
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Here's Why Investors Should Hold Humana (HUM) Stock for Now
Humana Inc. (HUM - Free Report) is aided by an expanding membership base, a robust 2023 business outlook, buyouts and collaborations, and a notable financial position.
Zacks Rank & Price Performance
Humana currently carries a Zacks Rank #3 (Hold).
The stock has gained 4.5% in the past three months compared with the industry’s 12.2% rise. The Zacks Medical sector has dipped 5.8% against the S&P 500 Composite’s gain of 0.9% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
HUM boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Robust Growth Prospects
The Zacks Consensus Estimate for Humana’s 2023 earnings is pegged at $28.29 per share, suggesting growth of 12.1% from the prior-year reported figure. The consensus mark for 2024 earnings is pegged at $31.42 per share, indicating an improvement of 11.1% from the prior-year estimate.
Impressive Earnings Surprise History
HUM’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 5.5%.
Strong 2023 Outlook
Management forecasts adjusted revenues to be within $100.7-$102.7 billion this year, the midpoint of which suggests 9.4% growth from the 2022 figure.
Adjusted earnings per share are anticipated to be a minimum of $28.25 in 2023, which indicates an improvement of 11.9% from the 2022 level.
Key Drivers
Humana gains on the back of an expanding customer base, which it earns through distributing cost-effective health insurance plans across different U.S. communities and making efforts to upgrade such plan offerings from time to time. Humana recently announced its Medicare Advantage plans for 2024, aiming to expand to 39 new counties in 2024. Overall, its Medicare HMO offerings are targeted to reach 140 counties in 2024, while its Medicare LPPO plans are likely to be available across 80 counties in the same time frame.
The strength of these plans should fetch numerous contract wins and renewed agreements from federal or state authorities. An increase in membership fetches the resultant benefit of improved premiums, the most significant contributor to a health insurer’s top line.
An aging U.S. population is likely to sustain the solid demand for Humana’s Medicare plans. Management expects individual Medicare Advantage membership will witness a minimum membership growth of 860,000 in 2023. In order to cater more effectively to the aging population, HUM has the CenterWell brand in place.
This August, the health insurer introduced the CenterWell Primary Care Anywhere program to provide enhanced primary care to seniors at home across specific Louisiana and Georgia locations. In November 2023, CenterWell announced its expansion plans across Indiana, which will help the brand solidify its presence in the region.
A series of acquisitions undertaken over the years have enhanced Humana’s capabilities, diversified income streams, expanded its global presence and widened its customer base. HUM often resorts to collaborations with well-reputed organizations to launch new plans or upgrade features within the existing ones. In October 2023, Humanapartnered with Denver Health to offer enhanced care access and convenience for its Medicare Advantage customer base across the Denver area.
Humana boasts a solid cash position and cash-generating abilities, with the support of which it can undertake uninterrupted growth-related initiatives. As of Sep 30, 2023, its cash and cash equivalents of $15.1 billion were way higher than the short-term debt of $2.2 billion. In the first nine months of 2023, HUM generated operating cash flows of $11.1 billion, which increased 14.4% year over year.
Stocks to Consider
Some better-ranked stocks in the Medical space are Integer Holdings Corporation (ITGR - Free Report) , Centene Corporation (CNC - Free Report) and DexCom, Inc. (DXCM - Free Report) . Integer Holdings sports a Zacks Rank #1 (Strong Buy), while Centene and DexCom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Integer Holdings surpassed estimates in each of the last four quarters, the average surprise being 12%. The Zacks Consensus Estimate for ITGR’s 2023 earnings and revenues indicates 18.6% and 14.9% growth, respectively, from their corresponding prior-year actuals.
Centene Corporation’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 5.6%. The Zacks Consensus Estimate for CNC’s 2023 earnings and revenues indicates 15.2% and 4.4% growth, respectively, from the prior-year actuals.
DexCom’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 36.4%. The Zacks Consensus Estimate for DXCM’s 2023 earnings indicates a rise of 64.4%, while the consensus mark for revenues suggests an improvement of 23.5% from the corresponding year-ago reported figures.