Humana (HUM) closed the most recent trading day at $491.74, moving +1.07% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.01%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq added 0.67%.
Heading into today, shares of the health insurer had gained 5.63% over the past month, outpacing the Medical sector’s loss of 4.56% and the S&P 500’s loss of 4.45% in that time.
Investors will be hoping for strength from Humana as it approaches its next earnings release. In that report, analysts expect Humana to post earnings of $7.14 per share. This would mark year-over-year growth of 3.78%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $25.34 billion, up 11.16% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $28.26 per share and revenue of $102.34 billion. These totals would mark changes of +11.97% and +10.19%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Humana. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. Humana is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Humana is holding a Forward P/E ratio of 17.22. Its industry sports an average Forward P/E of 15.77, so one might conclude that Humana is trading at a premium comparatively.
It is also worth noting that HUM currently has a PEG ratio of 1.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. HUM’s industry had an average PEG ratio of 1.07 as of yesterday’s close.
The Medical – HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 32% 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.
Sources: Zacks Investment Research
S&P 500: a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.
Dow: the Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.
Nasdaq: a stock market index that measures the stock performance of more than 3,000 companies listed on the Nasdaq stock exchange.
Health insurer: a company that provides health insurance coverage to individuals or groups in exchange for premium payments.
Zacks Rank: a rating system that uses analyst estimates and changes in those estimates to evaluate the potential performance of a stock.
Forward P/E ratio: a ratio calculated by dividing the current price of a stock by its estimated future earnings per share.
PEG ratio: a ratio that compares a stock’s price-to-earnings (P/E) ratio to its expected earnings growth rate.
Zacks Industry Rank: a ranking system that evaluates the strength of industry groups based on the average Zacks Rank of the individual stocks within the groups.
Medical – HMOs industry: an industry within the Medical sector that includes health maintenance organizations (HMOs) that provide managed healthcare services.