Humana (NYSE:HUM) Nostives on Q4 Loss, Grim Outlook

Humana (NYSE:Hmm) shares of the insurance and healthcare services provider fell more than 15% in today's early session after disappointing fourth-quarter numbers and a poor outlook.

In Q4, revenue rose 17.9% year-over-year to $26.4 billion. However, EPS of -$0.11 was a surprise, versus Street estimates of $0.76. In comparison, the company generated EPS of $1.97 in the prior-year period. Humana's fourth-quarter performance was marked by an increase in Medicare Advantage medical spending trends, as inpatient utilization was higher than expected.

Also, its benefits expense ratio, the cost of insurance coverage divided by the revenue earned from insurance premiums, increased to 90.7% from 87.3% in the previous year. On the other hand, it decreased from 45.9 to 41.4. The company's Centerwell segment generated operating income of $387 million. In contrast, its insurance division saw an operating loss of $426 million compared to an operating profit of $46 million a year ago.

For fiscal 2024, Humana expects adjusted EPS of $16. This figure was $26.09 in 2023. The company expects healthcare spending to remain high throughout 2024.

Is HUM a good stock to buy?

Overall, the Street has a strong Buy consensus rating on Humana with an average price target of 539.61. Conversely, the stock is currently trading at $343.3 at the time of writing.

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