Humana Inc. (NYSE:HUM), a leading health insurer known for its Medicare Advantage plans, faces stiff competition from giants like UnitedHealth Group and Aetna. These plans, backed by the U.S. government, cater to individuals aged 65 and older or those with disabilities, with Humana receiving a fixed rate for managing these services.
On February 11, 2025, Humana unveiled its earnings, revealing an EPS of -$2.16, which was an improvement over the anticipated -$2.26. Despite this, the company reported a significant fourth-quarter loss of $693 million. This loss was a factor in the company's full-year profit of $1.2 billion for 2024, as it strategically exits unprofitable Medicare Advantage markets to bolster future performance.
The company's revenue for the period stood at approximately $29.21 billion, surpassing the expected $28.84 billion. However, Humana forecasts its annual profit for 2025 to fall short of Wall Street estimates due to elevated costs associated with its government-backed plans. This forecast led to a 5% drop in Humana's shares to $253.20 during premarket trading.
Looking ahead, Humana anticipates an adjusted profit per share of about $16.25 for 2025, which is below the analysts' expectations of $16.71 per share, as reported by LSEG. The company's financial results were impacted by factors such as amortization of intangibles and the exit from the employer group commercial medical products business, contributing to a consolidated pretax loss of $862 million in the fourth quarter of 2024.
The enterprise value to sales ratio stands at around 0.35, with an earnings yield of approximately 4.23%. The debt-to-equity ratio is about 0.74, indicating moderate debt levels, while the current ratio is approximately 1.76, showcasing the company's ability to cover short-term liabilities with short-term assets.
