Humana stock lags Nasdaq amid growth and cost concerns
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Humana Inc. (HUM), a prominent U.S.-based health insurer with a market capitalization of $30.2 billion, continues to underperform relative to the broader market and specifically the Nasdaq Composite. Despite offering a comprehensive range of health services, including Medicare, Medicaid, and specialty insurance products, Humana shares have experienced significant declines, reflecting investor concerns around future growth and rising medical costs.
Over the past three months, Humana stock has declined by 8.7%, outperforming slightly against the Nasdaq Composite’s 11.3% decrease during the same period. However, longer-term performance paints a more challenging picture, with Humana shares down 27.8% over the past 52 weeks, notably underperforming the Nasdaq, which has gained 8.5%. Year-to-date, HUM has fallen by 1.8%, a more modest decline compared to Nasdaq’s 8.6% drop.
Humana’s recent financial results have contributed to investor pessimism. Despite exceeding fourth-quarter 2024 adjusted revenue and earnings expectations, Humana’s guidance for 2025 significantly missed market expectations. The forecast included a projected adjusted profit of $16.25 per share, below analyst estimates, and an anticipated loss of 550,000 Medicare Advantage members. Additionally, the company's medical cost ratio rose to 91.5%, surpassing analyst forecasts and raising concerns about rising medical expenses.
In comparison, competitor CVS Health Corporation has fared better, demonstrating stronger performance despite broader market volatility. CVS shares have declined just 13.8% over the past year but have surged by 44.5% year-to-date.
Analysts maintain a moderately optimistic outlook on Humana, reflected in a consensus "Moderate Buy" rating. The current trading price remains below the analysts' average price target of $286.20, suggesting potential upside, though investor caution remains warranted given recent operational challenges and market conditions.
Over the past three months, Humana stock has declined by 8.7%, outperforming slightly against the Nasdaq Composite’s 11.3% decrease during the same period. However, longer-term performance paints a more challenging picture, with Humana shares down 27.8% over the past 52 weeks, notably underperforming the Nasdaq, which has gained 8.5%. Year-to-date, HUM has fallen by 1.8%, a more modest decline compared to Nasdaq’s 8.6% drop.
Humana’s recent financial results have contributed to investor pessimism. Despite exceeding fourth-quarter 2024 adjusted revenue and earnings expectations, Humana’s guidance for 2025 significantly missed market expectations. The forecast included a projected adjusted profit of $16.25 per share, below analyst estimates, and an anticipated loss of 550,000 Medicare Advantage members. Additionally, the company's medical cost ratio rose to 91.5%, surpassing analyst forecasts and raising concerns about rising medical expenses.
In comparison, competitor CVS Health Corporation has fared better, demonstrating stronger performance despite broader market volatility. CVS shares have declined just 13.8% over the past year but have surged by 44.5% year-to-date.
Analysts maintain a moderately optimistic outlook on Humana, reflected in a consensus "Moderate Buy" rating. The current trading price remains below the analysts' average price target of $286.20, suggesting potential upside, though investor caution remains warranted given recent operational challenges and market conditions.