It has been about a month since the last earnings report for Humana (HUM Quick QuoteHUM - Free Report) . Shares have added about 19.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Humana due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

HUM Misses Q2 Earnings on Higher Benefit Costs, Ups '25 EPS View

Humana reported second-quarter 2025 adjusted earnings of $6.27 per share, which missed the Zacks Consensus Estimate by 0.8%. The bottom line decreased 9.9% year over year. 

Adjusted revenues of $32.4 billion advanced 10.2% year over year. The top line beat the consensus mark by 1.9%. 

The quarterly results suffered a blow from an elevated expense level, dragging net income. A decline in individual Medicare Advantage membership also led to the downside.  Nevertheless, the downside was partly offset by the strong performance of the CenterWell unit on the back of strong pharmacy and primary care businesses.

Q2 Operational Update

Humana’s premiums improved 9.1% year over year to $30.7 billion, higher than the Zacks Consensus Estimate of $30.2 billion and our estimate of $30.1 billion. Services revenues of $1.4 billion climbed 27.3% year over year and beat the consensus mark of $1.31 billion and our estimate of $1.33 billion.

Investment income came in at $272 million, which slipped 8.7% year over year. The metric beat the consensus estimate of $271 million but fell short of our estimate of $285.6 million.

The benefit ratio deteriorated 70 basis points (bps) year over year to 89.7% in the second quarter due to expansion of state-based contracts and stand-alone PDP businesses that carry a higher benefit ratio. A decline in individual Medicare Advantage membership also affected the metric. 

Total operating expenses of $31.3 billion escalated 10.2% year over year, higher than our estimate of $29.9 billion. The year-over-year increase was due to higher benefits and operating costs. Operating cost ratio deteriorated 20 bps year over year to 11%. 

HUM’s net income totaled $543 million in the quarter under review, which plunged 19.9% year over year.

Q2 Segmental Update

Insurance

The segment recorded adjusted revenues of $31.1 billion in the second quarter, which improved 9.6% year over year, resulting from improved per-member Medicare premiums coupled with an expanding customer base in stand-alone prescription drug plans and state-based contract businesses.     

Adjusted operating income fell 6.8% year over year to $770 million. Adjusted benefit ratio of 89.9% deteriorated 50 bps year over year. Adjusted operating cost ratio improved 10 bps year over year to 8.3%.

Total medical membership of the segment was 14.8 million as of June 30, 2025, which tumbled 9% year over year. The metric lagged the Zacks Consensus Estimate of 15.4 million and our estimate of 15.9 million.

CenterWell

Revenues in the unit advanced 11.9% year over year to $5.5 billion in the quarter under review, which outpaced the Zacks Consensus Estimate of $5.2 billion and our estimate of $5.1 billion. The metric benefited on the back of higher revenues stemming from the company’s pharmacy and primary care businesses.  

Adjusted operating income was $404 million, which increased 2.5% year over year. The operating cost ratio deteriorated 70 bps year over year to 92.7%.

Humana’s Financial Update (As of June 30, 2025)

Humana exited the second quarter with cash and cash equivalents of $4 billion, which surged 81.9% from the 2024-end level. Total assets of $50.4 billion increased 8.3% from the figure at 2024-end.  

Long-term debt amounted to $12.6 billion, up 12.9% from the figure as of Dec. 31, 2024. Debt to capitalization improved 290 bps year over year to 40.7% at the second-quarter end. 

Total stockholders’ equity of $18.2 billion improved 11.4% from the figure at 2024-end.  

HUM generated net cash from operations of $1.6 billion in the first half of 2025, which dipped 2.1% from the prior-year comparable period.

HUM’s Capital Deployment Update

Humana bought back shares worth $109 million in the first half of 2025. It also paid dividends of $214 million during the same time frame. As of July 29, 2025, HUM had a share buyback capacity of $2.83 billion.

2025 View

Adjusted earnings per share (EPS) are currently forecasted at around $17.00, up from the earlier view of around $16.25. The revised outlook indicates a 4.9% rise from the 2024 figure. GAAP EPS is projected to be roughly $13.77, down from the earlier view of around $14.68. 

Revenues are presently estimated to be a minimum of $128 billion compared with the prior view of $126-$128 billion. The updated guidance implies a 8.7% increase from the 2024 figure. The Insurance segment’s revenues are forecasted at a minimum of $123 billion compared with the earlier guidance of $121-$123 billion. Revenues of the CenterWell segment are expected at a minimum of $21.5 billion compared with the prior outlook of $20.5-$21.5 billion.

Management anticipates Individual Medicare Advantage membership to witness a decline of "up to 500,000" in 2025, while the earlier view called for metric to record a decrease of around 550,000. Group Medicare Advantage membership is still expected to stay relatively flat from the 2024-end figure. 

Membership from the Medicare stand-alone PDP is reiterated to increase around 200,000 this year. State-based contracts are still expected to witness membership growth within 175,000-250,000. 

The benefit ratio of the Insurance unit continues to be projected between 90.1% and 90.5% for 2025. The consolidated GAAP operating cost ratio continues to be anticipated within the band of 11.3-11.7%. 

GAAP cash flow from operations continues to be estimated within $2.4 billion and $2.9 billion. Meanwhile, capital expenditures are still projected to be roughly $650 million.

The effective tax rate is still expected at around 25% while the weighted average share count is presently anticipated at around 121 million.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 13.09% due to these changes.

VGM Scores

Currently, Humana has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Humana has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Humana belongs to the Zacks Medical - HMOs industry. Another stock from the same industry, Molina (MOH Quick QuoteMOH - Free Report) , has gained 10.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Molina reported revenues of $11.43 billion in the last reported quarter, representing a year-over-year change of +15.7%. EPS of $5.48 for the same period compares with $5.86 a year ago.

Molina is expected to post earnings of $3.82 per share for the current quarter, representing a year-over-year change of -36.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.3%.

Molina has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.