Humana (HUM): Profit Margins Decline Contradicts Optimistic Recovery Narratives

Humana (HUM) reported net profit margins of 1.3%, down slightly from 1.5% a year ago. Earnings have trended negative over the past year and have declined by an average of 17.2% per year over the last five years. Looking ahead, analysts forecast a strong turnaround with earnings expected to grow 26.9% per year, well ahead of the broader US market's projected 15.8%. Revenue growth, however, is set to trail the overall market at 7.1% per year compared to 10.4%. With valuation multiples below both industry and peer averages and no major risks identified, the results set a cautiously optimistic tone for future earnings recovery and value.

See our full analysis for Humana.

Next, we’ll see how these headline numbers compare with the dominant market narratives and whether the latest results back up or contradict the popular outlooks among investors.

See what the community is saying about HumanaNYSE:HUM Earnings & Revenue History as at Nov 2025

Margin Expansion Goals Set to Outpace Peers

Analysts expect Humana's net profit margin to rise from 1.3% today to 2.2% in three years, aiming for faster margin improvement than the broader US healthcare industry. Analysts' consensus view points to margin gains powered by greater operational efficiency and increased AI use. However,

clinical excellence efforts such as medication adherence and in-home visits are needed to deliver on these ambitions, while shifts in Medicare rules and high-acuity patient costs could put pressure on progress, leading to ongoing debate about execution risk. With operational upgrades and clinical campaigns in focus, investors are considering whether these moves are enough to beat industry benchmarks. See how market voices are weighing potential upside in the full consensus narrative. 📊 Read the full Humana Consensus Narrative.

Analyst Price Target Signals Modest Upside

At a current share price of $264.94, Humana trades about 10% below the analyst consensus price target of $294.96, suggesting analysts see only moderate share price appreciation ahead. The consensus narrative views this valuation gap as a result of fairly balanced growth and risk factors, with

forecasts requiring $150.9 billion in revenue and $3.3 billion in earnings by 2028, and debate over whether Humana can deliver on strategic growth initiatives quickly enough to justify a lower 13.2x PE multiple compared to today’s 20.2x.

Valuation Multiples Stand Out Against Industry

Humana's price-to-earnings ratio of 20.2x is below the US healthcare industry average of 21.5x and its peer group at 23.5x, while its share price remains at a steep discount to a DCF fair value of $667.31, supporting a relative value argument. The consensus narrative emphasizes that this discount, combined with positive near-term earnings forecasts,

supports the outlook for an earnings recovery even as broader industry expectations remain high, but regulatory and margin risks continue to keep some investors cautious despite the valuation case.

Story Continues

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Humana on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Humana.

See What Else Is Out There

Despite an optimistic earnings outlook, Humana's projected revenue growth and margin improvements lag industry peers and depend on successful risk management and operational upgrades.

Seeking steadier results? Use stable growth stocks screener (2074 results) to find companies that consistently deliver reliable revenue and earnings growth across market cycles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include HUM.

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