Humana Inc. (NYSE:HUM) stock tumbled to a fresh 52-week low on Wednesday after the health insurer’s fiscal 2026 outlook fell well short of Wall Street expectations, overshadowing a fourth-quarter revenue beat and solid operating performance.
Outlook
Humana expects fiscal 2026 adjusted earnings per share of at least $9, compared to the Wall Street estimate of $11.92.
The anticipated year-over-year decline from $9.84 in 2025 is driven by the Star Ratings headwind for Bonus Year 2026, net of mitigation.
The company expects the 2026 Insurance segment benefit ratio to be 92.75%, plus or minus 25 basis points, with an operating cost ratio of 10%.
Humana anticipates fiscal 2026 individual Medicare Advantage membership growth of approximately 25% over 2025, driven by new sales and improved retention from the company’s customer-led benefit strategy and changes to its customer service approach.
The company expects Group Medicare Advantage growth of approximately 150,000 and Individual Medicare stand-alone PDP growth of roughly 1,000,000.
Humana expects 2026 sales of at least $160 billion compared to the consensus of $145.31 billion.
Earnings Snapshot
The U.S. insurer reported its fourth-quarter adjusted loss of $3.96, wider than the loss of $2.16 reported last year, exceeding the consensus loss estimate of $4.00.
The company reported sales of $32.64 billion, up from $29.19 billion a year ago, beating the consensus of $32.08 billion.
The increase was driven by higher per-member Medicare and state-based contract premiums, with the Medicare increase attributable primarily to a higher direct subsidy under the Inflation Reduction Act (IRA), and by membership growth in the company’s state-based contract and stand-alone PDP businesses.
Performance Metrics
Humana ended the quarter with 14.99 million in total medical membership, down from 16.34 million a year ago.
Individual Medicare Advantage membership reached 5.25 million, down from 5.66 million a year ago.
The total number of Medicare members was 8.28 million, down from 8.49 million the previous year.
The insurance segment benefit ratio of 93.1% in line with the previously disclosed expectation of approximately 93.5%, reflecting a shift in line of business mix resulting from growth in the state-based contracts and stand-alone PDP businesses, which carry a higher benefit ratio, combined with a reduction in individual Medicare Advantage membership.
Operating cost ratio stood at 10.8% for the quarter.
The fiscal 2025 Insurance segment benefit ratio was 90.4%. As expected, it is at the top end of the guidance range of 90.1% to 90.5%.
“We were pleased with our solid financial performance and operational progress in 2025,” said Humana President and CEO Jim Rechtin. “We continue to feel good about our consumer-focused strategy and our individual Medicare Advantage membership growth in 2026…”
HUM Price Action: Humana shares were down 4.22% at $173.65 at the time of publication on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
