HUMANA INC

HUM

Forward P/E: 23.83×
Mkt cap: 47.4 B USD
EV: 55.6 B USD
Sector: Healthcare
Coverage: 2007–2025
Currency: USD
Next event: Feb 19, 2027

JP Valuation

JP Score

31,1

Out of profile · window 5 years

JP entry price

OUT OF PROFILE

No target price is issued: the company falls outside the profile this method looks for.

Financial comments5

Interest coverage below 4×.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.
Expected stagnation: consensus points to no growth.
ROIC below the required return: growth destroys value.
Impairment of fcf: 27 % of the window, weighted by recency → 3.3 points. It is the only place in the model where a bad year subtracts.

Calculation comments1

Anomalous financial year(s) in FCF (M4 payout) (2025): out of this component's estimators; they still count in the counters and hard cuts.

Quality factors

Each factor scores 0–100 on its own scale; the score is their weighted average.

Score	Weight → points
Growth consistency39 Earnings · fit to the log-linear line · σ_resid = 0.14522 %0 Earnings · hit rate · 30 %16 %0 Earnings · volatility · σ = 0.28311 %4 Revenue · fit to the log-linear line · σ_resid = 0.01014 %97 Revenue · hit rate · 100 %11 %94 Revenue · volatility · σ = 0.0157 %98 Forward · trajectory coherence · consensus -1.7 % vs. trend -18.9 %20 %36	·20 → 7,71
Growth pace27 Realized · -16.1 %50 %25 Expected · -1.7 %50 %29	·20 → 5,48
No recent stagnation38 Realized slowdown · 1.10×50 %36 Expected slowdown · 0.10×50 %39 3-year earnings CAGR at or below zero (-17.8 %): the engine has slowed. It is scored on the acceleration scale, not cut — a binary cut turned a continuous fact into a cliff, and fired on 36 % of the universe. Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped. Expected stagnation: consensus points to no growth.	·15 → 5,67
FCF quality90 FCF / net income conversion · 1.16×100 %90 Window chosen: last 3 years (the best of those evaluated). Alternative · last 5 years: conversion 1.01× → 76 points. Positive FCF in 3 of the 3 years in the window.	·15 → 13,55
Debt34 Net debt / EBITDA · 2.32×100 %34 Interest coverage (EBIT / \|interest\|) = 2.1×. Interest coverage below 4×.	·15 → 5,05
Return on invested capital (ROIC)11 Level (recency-weighted mean) · 7.1 %50 %9 Spread over the required return · −0.0 pp over the 10 % required30 %21 Trend · −7.6 pp over 5 years20 %0 Average ROIC (7.1 %) below the required return (10 %): growth destroys value. ROIC below the required return: growth destroys value.	·15 → 1,61
Weighted base	·100 → 39,08

Modifiers and penalties

The factors build the score; the modifiers correct it, within +23 / −28. Same 0–100 bar, 100 is always good.

Score	Range	Points
Gross margin trend · −4.3 pp accumulated over 4 years7	±8	-6,8
Altman Z'' · Z'' = 8.35100	0/−15	0,0
Shareholder returns · shareholder yield 2.2 %15 Effective buyback (net share count) · 1.3 %9 Dividend yield (last DPS / price today) · 0.9 %6	+15/−5	+2,2
Impairment · 27 % · worst magnitude: fcf73 Earnings · 14.8 %85 Free cash flow · 27.4 %73 EBITDA · 0.0 %100	0/−12	-3,3
39,1 − 6,8 + 0,0 + 2,2 − 3,3 =31,1

Calculated on Sep 5, 2026

Score

Weight → points

Growth consistency39

Earnings · fit to the log-linear line · σ_resid = 0.14522 %0
Earnings · hit rate · 30 %16 %0
Earnings · volatility · σ = 0.28311 %4
Revenue · fit to the log-linear line · σ_resid = 0.01014 %97
Revenue · hit rate · 100 %11 %94
Revenue · volatility · σ = 0.0157 %98
Forward · trajectory coherence · consensus -1.7 % vs. trend -18.9 %20 %36

·20 → 7,71

Growth pace27

Realized · -16.1 %50 %25
Expected · -1.7 %50 %29

·20 → 5,48

No recent stagnation38

Realized slowdown · 1.10×50 %36
Expected slowdown · 0.10×50 %39
3-year earnings CAGR at or below zero (-17.8 %): the engine has slowed. It is scored on the acceleration scale, not cut — a binary cut turned a continuous fact into a cliff, and fired on 36 % of the universe.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.
Expected stagnation: consensus points to no growth.

·15 → 5,67

FCF quality90

FCF / net income conversion · 1.16×100 %90
Window chosen: last 3 years (the best of those evaluated).
Alternative · last 5 years: conversion 1.01× → 76 points.
Positive FCF in 3 of the 3 years in the window.

·15 → 13,55

Debt34

Net debt / EBITDA · 2.32×100 %34
Interest coverage (EBIT / |interest|) = 2.1×.
Interest coverage below 4×.

·15 → 5,05

Return on invested capital (ROIC)11

Level (recency-weighted mean) · 7.1 %50 %9
Spread over the required return · −0.0 pp over the 10 % required30 %21
Trend · −7.6 pp over 5 years20 %0
Average ROIC (7.1 %) below the required return (10 %): growth destroys value.
ROIC below the required return: growth destroys value.

·15 → 1,61

Weighted base

·100 → 39,08

Score

Range

Points

Gross margin trend · −4.3 pp accumulated over 4 years7

±8

-6,8

Altman Z'' · Z'' = 8.35100

0/−15

0,0

Shareholder returns · shareholder yield 2.2 %15

Effective buyback (net share count) · 1.3 %9
Dividend yield (last DPS / price today) · 0.9 %6

+15/−5

+2,2

Impairment · 27 % · worst magnitude: fcf73

Earnings · 14.8 %85
Free cash flow · 27.4 %73
EBITDA · 0.0 %100

0/−12

-3,3

39,1 − 6,8 + 0,0 + 2,2 − 3,3 =31,1