Humana HUM is a health care plan provider in the United States. The company provides health insurance benefits under Health Maintenance Organization, Private Fee-For-Service, and Preferred Provider Organization plans.
Analysts have taken a bearish stance on the company’s earnings outlook, landing it into a Zacks Rank #5 (Strong Sell).
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In addition, the company currently resides in the Zacks Medical – HMOs industry, which is currently ranked in the bottom 14% of all Zacks industries. Let’s take a closer look at a few other aspects of the company.
Humana
HUM shares have struggled to find their footing over the last year, losing nearly -29% in value and widely underperforming relative to the S&P 500. Shares faced notably strong selling pressure following its latest quarterly release, with the company falling short of the Zacks Consensus EPS estimate by 57%.
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The results were hampered by an additional increase in Medicare Advantage medical cost trends, causing the company to give ‘soft’ initial guidance for its FY24. The results snapped a streak of positive EPS surprises, with investors reacting negatively in response.
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The company’s profitability is forecasted to take a sizable hit in its current year (FY24), with the $16.05 Zacks Consensus EPS estimate representing a pullback of -38% from FY23. Shares presently trade at a 20.3X forward 12-month earnings multiple, above the five-year median and the respective Zacks industry average.
The stock carries a Style Score of ‘D’ for Value.
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Bottom Line
Negative earnings estimate revisions from analysts stemming from increased costs paint a challenging picture for the company’s shares in the near term.
Humana HUM is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
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