Humana Inc. (HUM)

Humana's stock price has declined significantly in the past six months. In October 2024, shares plummeted after CMS downgraded Medicare Advantage quality ratings, impacting bonus payments. In January 2024, preliminary financial results showed an increased benefits expense ratio and lower adjusted EPS, causing a stock price drop. Humana also disclosed expectations of higher medical costs for 2024, leading to a further fall in stock price.

Humana's business experiences demand seasonality, particularly within its Insurance segment. Medicare stand-alone Prescription Drug Plan (PDP) offerings have a seasonal impact on the benefit ratio, decreasing in the first quarter and increasing in the fourth quarter. The Commercial fully-insured product offering also experiences seasonality, with the benefit ratio tending to increase as members progress through their annual deductible and maximum out-of-pocket expenses. The exit from the Employer Group Commercial Medical Products business is anticipated to increase the first-quarter 2023 Insurance segment benefit ratio by approximately 30 basis points.

Humana Inc. is an American for-profit health insurance and well-being company based in Louisville, Kentucky, operating in the healthcare sector. It has two main segments: Insurance and CenterWell. The Insurance segment offers medical and specialty insurance products, including Medicare Advantage, prescription drug plans, Medicaid plans, TRICARE, specialty benefits, and commercial medical plans (being phased out). The CenterWell segment focuses on healthcare services, including pharmacy solutions, primary care clinics (CenterWell Senior Primary Care), and home health services (CenterWell Home Health). Humana generates revenue through insurance premiums and health services.

Humana Inc. has a national presence across the United States, serving a geographically diverse membership base across all 50 states, Puerto Rico, and the District of Columbia. Its headquarters are located in Louisville, Kentucky.

Humana has maintained a strong brand reputation in customer experience and corporate social responsibility. It ranked No. 1 among health insurers for customer experience by Forrester for the fourth consecutive year. Humana was also named to PEOPLE's "100 Companies That Care list" for its commitment to customers, employees, and community contributions. However, the Medicare Advantage star ratings downgrade and network disputes have presented reputational challenges.

Humana Inc. is a publicly traded company with ownership dispersed among various shareholders, predominantly institutional investors, who hold 92.92% of the shares. Individual investors hold 4.78%, and Humana insiders hold 2.30%. Major institutional owners include Vanguard Group Inc., BlackRock, Inc., Dodge & Cox, and State Street Corp. The largest individual shareholder is David A. Jones Sr., owning 0.89% of the company.