Humana Faces Challenges Ahead of Q4 Earnings Announcement

Humana Inc. anticipates a loss of $2.23 per share for Q4, reflecting challenges despite a previously strong performance. Analysts maintain a cautiously optimistic outlook, but the significant decline in EPS forecasts could impact investor sentiment.

Date: 06-01-2025

AI Rating: 5

Earnings Per Share (EPS)
Humana Inc. is expected to report a loss of $2.23 per share for the upcoming fiscal Q4, a significant increase in losses compared to the previous year's loss of $0.11 per share. This notable decline points to potential challenges the company is currently facing. However, for fiscal 2024, analysts project an EPS of $16.14, which is a 38.1% decrease from $26.09 in fiscal 2023. On a more positive note, there is an expectation of recovery with a projected year-over-year growth of 3.4%, culminating in an EPS of $16.68. This mixed EPS outlook leads to uncertainty about the stock's short to medium-term performance.
Revenue Growth
In the last quarter, Humana reported revenue of $29.3 billion, which was up 14.8% year-over-year. This revenue growth was driven by increases in Medicare premiums and membership growth, providing some reassurance about the company’s operational robustness despite EPS concerns. The raised expectations for Medicare Advantage membership growth to 265,000 indicate effective retention strategies and sales growth in the Medicare space.
Stock Performance
Over the past year, shares of Humana have dropped 43.5%, significantly underperforming market indices. Despite a strong Q3 performance that led to a 3.3% increase in stock value, the overall trend has been negative, raising concerns among investors.
Market Sentiment
Analysts hold a cautiously optimistic view on Humana's stock with a 'Moderate Buy' consensus, but the slight decrease in 'Strong Buy' recommendations could suggest some hesitation in the investment community. The average analyst price target of $286 implies a potential upside of 9%, which may attract some investors. Nonetheless, the significant projected decrease in EPS and current stock underperformance could weigh heavily on investor sentiment going forward.

Stocks: HUM