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Humana (HUM) Outpaces Stock Market Gains: What You Should Know

·3 min read

Humana (HUM) closed the most recent trading day at $454.64, moving +1.47% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.95%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.12%.

Heading into today, shares of the health insurer had gained 0.76% over the past month, outpacing the Medical sector's loss of 3.97% and the S&P 500's loss of 3.49% in that time.

Wall Street will be looking for positivity from Humana as it approaches its next earnings report date. On that day, Humana is projected to report earnings of $7.67 per share, which would represent year-over-year growth of 11.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.39 billion, up 13.31% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $24.65 per share and revenue of $93.09 billion. These totals would mark changes of +19.43% and +12.08%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Humana. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Humana currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Humana is currently trading at a Forward P/E ratio of 18.18. This represents a premium compared to its industry's average Forward P/E of 15.74.

It is also worth noting that HUM currently has a PEG ratio of 1.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - HMOs industry currently had an average PEG ratio of 1.16 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 84, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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