Humana Gains on Strong Membership Base and Sound Cash Reserves

Humana Inc. HUM remains well-poised for growth on the back of improved premium revenues, an aging U.S. population, acquisitions and adequate cash generation abilities. A strong 2025 outlook reinforces the growth prospects of the stock.Let’s delve deeper and analyze the factors aiding Humana.HUM’s Impressive Earnings Surprise HistoryHumana boasts a robust earnings surprise record. It has outpaced estimates in each of the trailing four quarters, the average surprise being 15.35%.Humana’s Solid 2025 OutlookThe health insurer exhibits a robust business outlook for 2025. Revenues are anticipated to be in the band of $126-$128 billion, the mid-point of which indicates an improvement of 7.8% from the 2024 figure.The Insurance segment’s revenues are estimated to be within $121-$123 billion. Revenues of the CenterWell segment are forecasted in the band of $20.5-$21.5 billion.Adjusted earnings per share are estimated to be around $16.25. The mid-point of the outlook indicates growth of 0.2% from the 2024 figure.HUM’s Continued Top-Line GrowthHumana experiences revenue growth, primarily fueled by increased premiums tied to a solid customer base in its Medicaid and Medicare operations. During 2024, premium revenues rose 10.7% year over year. Through its Insurance segment, Humana provides cost-effective health plans and is steadily expanding its footprint across various U.S. regions. These offerings have contributed to multiple contract wins and renewals from both federal and state agencies.The growing elderly population in the United States is expected to drive sustained demand for Humana’s Medicare plans. To further support senior care nationwide, the company has its CenterWell brand, introduced in 2022.Other health insurers offering Medicaid and Medicare plans throughout the United States include Centene Corporation CNC, UnitedHealth Group Incorporated UNH and Molina Healthcare, Inc. MOH.Humana’s Inorganic Growth InitiativesHumana has pursued strategic acquisitions to enhance capabilities and its nationwide footprint. Key buyouts include Family Physicians Group, Curo, Enclara, iCare and Inclusa. The acquisition of Enclara enhanced its hospice pharmacy services, while the iCare deal in Wisconsin expanded its Medicare footprint. Additionally, acquiring all assets of Wisconsin-based Inclusa further bolstered its capabilities in care coordination. HUM also takes a disciplined approach to portfolio optimization by divesting non-core operations to enhance profitability.HUM’s Sound Financial PositionHumana boasts sufficient cash reserves and adequate cash generation abilities. It held cash, cash equivalents and investment securities totaling $20.4 billion as of Dec. 31, 2024, comfortably exceeding its long-term debt of $11.1 billion. Sound operating cash flows have enabled HUM to adopt a disciplined capital deployment strategy through share repurchases and dividend payments. GAAP cash flow from operations is anticipated to be between $2.4 billion and $2.9 billion for 2025.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Humana Inc. (HUM): Free Stock Analysis Report Molina Healthcare, Inc (MOH): Free Stock Analysis Report Centene Corporation (CNC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks