How Does This Insurer Generate Revenue?
Humana is a health insurance company focused on providing medical coverage and related health benefits. It serves members through insurance plans, with revenue primarily tied to premiums and the delivery of health coverage. The business operates at large scale, supporting a broad member base with plan administration and care-related services. Its model depends on pricing risk appropriately and running a tight cost structure across claims, administration, and supporting operations.
Are Rising Premiums Supporting Profitability?
FundamentalsFor 2025, reported in USD, revenue reached USD 129.7 billion, growing 10.1% year over year, while net income was USD 1.2 billion. The trailing net profit margin sits at 0.82%, alongside a 1.73% operating margin, underscoring how much of the income statement outcome depends on tight cost control at scale.
On the balance sheet, cash was USD 4.2 billion against total debt of USD 12.4 billion. Depreciation and amortization were USD 773 million, and trailing ROE was 6.19%.
Is The Stock Fairly Priced Now?
DCF / MultiplesAt USD 327.54, the stock sits within a DCF range that runs from USD 213.28 in a weaker outcome to USD 365.81 centrally and USD 559.16 in a stronger outcome. The pricing also comes alongside a 34.87 P/E and 15.86 EV/EBITDA on a trailing basis.
Valuation Supports Tight Execution
TakeawayThe business works when costs stay tightly controlled. Execution needs to keep revenue growth from leaking into thin margins. The current setup depends on steady, repeatable underwriting discipline. A slip in claims or admin efficiency would hit earnings quickly. Overall, the operational bar is high, but the valuation is supportive.