Can Humana Beat Q1 Earnings Estimates on Growing Premiums?

Leading healthcare plan provider Humana Inc. HUM is set to report its first-quarter 2025 results on April 30, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $9.98 per share on revenues of $32.22 billion. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The first-quarter earnings estimate has witnessed two upward revisions over the past 60 days against no movement in the opposite direction. The bottom-line projection indicates a year-over-year increase of 38%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 9.8%.

For the current year, the Zacks Consensus Estimate for Humana’s revenues is pegged at $126.55 billion, implying a rise of 8% year over year. Also, the consensus mark for current-year EPS is pegged at $16.36 per share, calling for growth of around 0.9% on a year-over-year basis.

HUM beat the consensus estimate for earnings in each of the last four quarters, with the average surprise being 15.4%.

Humana Inc. Price and EPS Surprise

Humana Inc. price-eps-surprise | Humana Inc. Quote

Q1 Earnings Whispers for HUM

Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

HUM has an Earnings ESP of +0.57% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Shaping HUM’s Q1 Results?

Humana's revenue growth in the first quarter is expected to have been supported by higher Premiums. The Zacks Consensus Estimate for Premiums stands at $30.7 billion, suggesting an 8.6% year-over-year increase, while our model estimate is pegged at above $30.5 billion.

The Zacks Consensus Estimate for revenues from Medicare stand-alone PDPs is pegged at $1.7 billion, calling for a 110.8% year-over-year increase, while our estimate stands at around $1.1 billion.

The factors mentioned above are expected to have contributed to the company's year-over-year growth, positioning it for an earnings beat. However, the upsides are likely to have been partially offset by membership declines.

The Zacks Consensus Estimate for total medical memberships signals a 3.8% year-over-year decline, primarily due to a fall in the individual medicare advantage unit and the decrease of ASO commercial membership.

Our model estimate for total operating expenses for the Insurance segment indicates 7.6% year-over-year growth due to higher operating costs.

Other Stocks That Warrant a Look

Here are some other companies worth considering from the broader Medical space, as our model shows that these also have the right combination of elements to beat on earnings this time:

Cencora Inc. COR has an Earnings ESP of +0.91% and is a Zacks #2 Ranked player. 

The Zacks Consensus Estimate for Cencora’s bottom line for the to-be-reported quarter indicates 7.1% year-over-year growth. Cencora beat earnings estimates in each of the past four quarters, with the average surprise being 4.9%. The consensus estimate for COR’s revenues is pegged at $74.82 billion.

Acrivon Therapeutics Inc. ACRV has an Earnings ESP of +1.02% and is a Zacks #2 Ranked player. 

The Zacks Consensus Estimate for Acrivon’s bottom line for the to-be-reported quarter suggests 21.9% year-over-year growth. Acrivon beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 9.4%.

Addus HomeCare Corporation ADUS has an Earnings ESP of +0.30% and a Zacks Rank of 2. 

The Zacks Consensus Estimate for Addus Homecare’s earnings for the to-be-reported quarter is pegged at $1.33 per share, which has remained stable over the past week. The consensus estimate for Addus Homecare’s revenues is pegged at $340.01 million.

 

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This article originally published on Zacks Investment Research (zacks.com).

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