Here's Why Investors Should Retain Humana Stock for Now

Humana Inc. HUM benefits from a strong care delivery model centered on value-based care, increasing premiums, strategic acquisitions, an aging population in the United States and solid cash generation capacity. HUM’s shares have surged 55.7% in the year-to-date period compared with the industry’s growth of 20.9%.

Humana offers health insurance benefits through Health Maintenance Organization, Private Fee-For-Service and Preferred Provider Organization plans. It also provides specialty products such as dental, vision and other supplementary benefits.

Courtesy of solid prospects, HUM currently carries a Zacks Rank #3 (Hold).

Where Do Estimates for HUM Stand?

The Zacks Consensus Estimate for Humana’s 2026 earnings is pegged at $9.12 per share, which remained stable over the past seven days. Furthermore, the consensus mark for revenues is pegged at $162.6 billion for 2026, indicating a 25.3% year-over-year rise. It beat earnings estimates in each of the past four quarters, with an average surprise of 9.6%.

Humana Inc. Price, Consensus and EPS Surprise

Humana Inc. price-consensus-eps-surprise-chart | Humana Inc. Quote

HUM’s Growth Drivers

Humana’s Medicare Advantage business remains a key growth engine, with membership expansion providing a foundation for improving the earnings potential of the portfolio. The company is also benefiting from stronger engagement among members. In the second quarter of 2026, total Medicare Advantage membership grew 23.8% year over year. Meanwhile, total premiums increased 26.4% year over year to $38.8 billion.

CenterWell is adding another growth avenue by expanding its senior-focused primary care footprint while using its pharmacy and home health businesses to build a more integrated care platform. The strategy combines organic patient growth with targeted acquisitions and greater integration across its care delivery businesses. CenterWell’s revenues increased 22.6% year over year in the second quarter of 2026.

The company is expanding its Medicaid footprint through the statewide Illinois contract scheduled to begin in January 2027, giving additional opportunities to diversify growth beyond its core Medicare Advantage business. HUM is using targeted capital allocation to strengthen its healthcare delivery capabilities. The planned divestiture of its minority stake in Gentiva, valued at approximately $900 million, is expected to largely fund the acquisition of MaxHealth. The transaction fits with Humana’s broader focus on expanding CenterWell and building a more integrated care platform.

Humana is also incorporating technology, automation and AI into its efforts to improve operating efficiency and simplify its business model. The company is transforming selected vendor relationships into more strategic technology-enabled partnerships while integrating acquired operations onto common platforms.

HUM’s solid financial position also provides flexibility to support growth and shareholder returns. As of June 30, 2026, the company had cash, cash equivalents and investment securities of $23.9 billion. It has been returning excess capital to its shareholders in the past several years. Humana repurchased common shares worth $108 million in the first half of 2026. It also paid a dividend of $214 million in the first half of 2026.

Key Concerns for HUM Stock

Despite its strengths, there are challenges to monitor.

Humana is facing rising medical cost intensity, which is weighing on profitability. Total operating expenses have steadily increased as a share of revenues, reaching 96.7% in second-quarter 2026 from 96.6% a year ago, indicating limited operating leverage. Operating expenses rose 26.3% year over year in the second quarter of 2026. The company expects the benefit ratio for the insurance segment to be 92.75%, with a variability margin of plus or minus 25 basis points for 2026, indicating an increase from the 2025 level of 90.4%.

Humana is grappling with a debt-laden balance sheet, which induces an increase in interest expenses. This might put pressure on the company’s margins. As of June 30, 2026, long-term debt was $12 billion. The company’s total debt-to-capital of 43.1% exceeds the industry average of 41.5%, underscoring higher leverage. Also, its forward P/E of 29.91X is higher than the industry average of 15.99X.

Stocks to Consider

Some better-ranked stocks in the Medical space are BrightSpring Health Services, Inc. BTSG, Globus Medical, Inc. GMED and Centene Corporation CNC, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BrightSpring Health Services’ current-year earnings of $1.82 per share has witnessed six upward revisions in the past 30 days against no movement in the opposite direction. BTSG beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 16.1%. The consensus estimate for current-year revenues is pegged at $15.3 billion, suggesting 18.2% year-over-year growth.

The Zacks Consensus Estimate for Globus Medical’s current-year earnings of $4.93 per share has witnessed three upward revisions in the past 30 days, against no movement in the opposite direction. GMED beat earnings estimates in each of the trailing four quarters, with the average surprise being 27.9%. The consensus estimate for current-year revenues is pegged at $3.2 billion, suggesting 8.8% year-over-year growth.

The Zacks Consensus Estimate for Centene’s current-year earnings of $4.89 per share has witnessed nine upward revisions in the past 30 days, against no movement in the opposite direction. CNC beat earnings estimates in each of the trailing four quarters, with an average surprise of 151.3%. The consensus estimate for current-year revenues is pegged at $196.3 billion, suggesting 0.8% year-over-year growth.

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