Investment Thesis
Humana demonstrates solid financial health with strong liquidity ratios (2.0x current ratio) and low leverage (0.70x debt/equity), supported by exceptional interest coverage of 17.0x. However, the business faces profitability headwinds evidenced by declining net income (-1.2% YoY), extremely thin net margins (0.9%), and weak free cash flow conversion (0.3% FCF margin), suggesting operational challenges in the managed care business despite substantial revenue scale.
HUM Strengths
- Strong balance sheet with manageable debt levels (0.70x debt/equity) and substantial cash position (4.2B)
- Excellent liquidity position with 2.00x current and quick ratios indicating short-term financial flexibility
- Exceptional interest coverage ratio of 17.0x demonstrates strong ability to service debt obligations
- Massive scale with 129.7B in revenue positioning as a major player in healthcare services
HUM Risks
- Declining profitability with net income down 1.2% YoY despite massive revenue base, indicating margin compression
- Extremely thin net profit margin of 0.9% leaves minimal buffer for operational disruptions or adverse developments
- Weak free cash flow generation relative to revenue scale (0.3% FCF margin) limits capital deployment flexibility
- Low return metrics (ROE 6.7%, ROA 2.4%) suggest inefficient capital utilization relative to asset base
- Managed care sector exposure to regulatory and reimbursement rate pressures
Key Metrics to Watch
- Net profit margin trend and underlying cost inflation in medical services
- Free cash flow generation and sustainability of capital expenditure levels
- Operating margin trajectory in core insurance segments
- Medical loss ratio trends and reimbursement rate sustainability
HUM Financial Metrics
HUM Profitability Ratios
HUM Balance Sheet & Liquidity
HUM 5-Year Financial Trend
5-Year Trend Summary: HUMANA INC's revenue has grown significantly by 91% over the 5-year period, indicating strong business expansion. The most recent EPS of $20.00 reflects profitable operations.
HUM Growth Metrics (YoY)
HUM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.1B | $195.0M | $1.62 |
| Q2 2025 | $1.1B | $545.0M | $4.51 |
| Q1 2025 | $1.1B | $741.0M | $6.11 |
| Q3 2024 | $1.0B | $480.0M | $3.98 |
| Q2 2024 | $978.0M | $679.0M | $5.62 |
| Q1 2024 | $999.0M | $741.0M | $6.11 |
| Q3 2023 | $1.0B | $832.0M | $6.71 |
| Q2 2023 | $978.0M | $696.0M | $5.48 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HUM Capital Allocation
HUM SEC Filings
Access official SEC EDGAR filings for HUMANA INC (CIK: 0000049071)