GET DAILY SIGNALSHumana (HUM) Narrows Q3 Loss and Raises Full-Year Guidance
Key Takeaways
- Humana reported a third quarter 2026 adjusted loss of $0.70 per share, narrower than the roughly $1.00 consensus loss and down from adjusted earnings of $3.24 per share a year earlier.
- Revenue climbed about 26% year over year to $41.16 billion, topping analyst estimates, driven by Medicare membership growth and higher premiums.
- Management raised its full year 2026 adjusted earnings per share (EPS) guidance to at least $9.50, up from a prior floor of $9.00.
- The insurance segment benefit ratio of 93.7% came in better than management's guidance of slightly above 94%.
- GAAP (Generally Accepted Accounting Principles) EPS was $1.33, lifted by a noncash gain tied to restructuring its CenterWell primary care joint ventures with a new BlackRock partnership.
- For deeper coverage, explore Humana's Major News, Today's Price Move, Price Targets, and Forecast pages.
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Earnings Context and Why It Matters
Humana's quarterly results serve as an important indicator for the Medicare Advantage sector overall, given the company's significant position in government-sponsored coverage. The third quarter has drawn particular attention as investors gauge how the company is handling the Star Ratings pressure for bonus year 2026, which has weighed on margins and contributed to the adjusted loss. Solid membership gains in Medicare and careful expense control have helped drive revenue higher, yet medical cost trends and the benefit ratio continue to shape the profit picture. The update also provided insight into the company's ongoing margin recovery efforts, making the raised guidance and comments on 2027 positioning relevant for shareholders and anyone following the managed care space.
Reported Results
Humana posted a third quarter 2026 adjusted loss of $0.70 per share, which beat the consensus estimate of roughly a $1.00 loss yet marked a decline from adjusted earnings of $3.24 per share in the same period last year. On a GAAP basis, diluted EPS came in at $1.33, compared with $1.62 a year earlier, helped by a noncash gain from the restructuring of its primary care joint ventures. Total revenue increased about 26% year over year to $41.16 billion, exceeding consensus estimates near $40.9 billion. Premiums rose roughly 26% to $38.7 billion, while services revenues grew about 33%. Total medical membership reached 18.04 million, up from 14.99 million a year ago, including 6.46 million individual Medicare Advantage members. The insurance segment benefit ratio improved to 93.7%, which was better than the company's "slightly above 94%" target. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry. Management lifted full year 2026 adjusted EPS guidance to at least $9.50 from at least $9.00, and raised full year 2026 GAAP EPS guidance to at least $15.09 from $6.52. Full year revenue guidance of at least $160 billion was kept unchanged, which sits slightly below some analyst projections.
Market Reaction and Investor Sentiment
Investor sentiment ahead of the release was measured, with focus on whether the Star Ratings impact would widen the expected loss. The narrower-than-anticipated loss, revenue beat, and raised full year adjusted EPS guidance were viewed positively overall, although the stock's initial response was mixed, with shares moving modestly higher in early trading after the announcement. Investors appeared to balance the improved near-term results against a full year revenue outlook that remained a bit below certain consensus levels. Comments on a top-quartile Star Ratings outcome for bonus year 2028 and solid early performance in the annual election period for 2027 added further support, framing the report as generally constructive despite the headline adjusted loss.
Forward Outlook and Key Factors to Monitor
Looking ahead, attention will center on Humana's progress in converting operational improvements into margin recovery. Management indicated that cost trends are tracking in line with or better than expectations and reiterated its target of returning individual Medicare Advantage margins toward the 3% range by 2028. The strong Star Ratings result for bonus year 2028 is expected to provide a one-time financial benefit, part of which management plans to return to shareholders. Several near-term developments are worth watching. The company intends to provide an investor update in December and expects to complete the sale of its minority interest in Gentiva, which should generate roughly $900 million in pretax proceeds. The new BlackRock joint venture is also projected to lower the GAAP debt-to-capital ratio in the fourth quarter. At the same time, investors will track medical cost trends and prescription drug (Part D) cost pressures into 2027, where management has highlighted higher trends driven by specialty pharmaceuticals. Membership retention and new sales during the annual election period will also influence next year's margin path.
Exploring AI Tools for Additional Insights
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
HUM in downward trend: price may decline as a result of having broken its higher Bollinger Band on November 06, 2026
HUM broke above its upper Bollinger Band on November 06, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 38 similar instances where the stock broke above the upper band. In 28 of the 38 cases the stock fell afterwards. This puts the odds of success at 74%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for HUM moved out of overbought territory on October 13, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 31 similar instances where the indicator moved out of overbought territory. In 21 of the 31 cases, the stock moved lower in the following days. This puts the odds of a move lower at 68%.
The Moving Average Convergence Divergence Histogram (MACD) for HUM turned negative on October 26, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 50 similar instances when the indicator turned negative. In 32 of the 50 cases the stock turned lower in the days that followed. This puts the odds of success at 64%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HUM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 65%.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 32 of 53 cases where HUM's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 60%.
The Momentum Indicator moved above the 0 level on November 06, 2026. You may want to consider a long position or call options on HUM as a result. In 54 of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.
HUM moved above its 50-day moving average on October 02, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for HUM crossed bullishly above the 50-day moving average on October 06, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 16 of 21 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 76%.
Following a +3.44% 3-day Advance, the price is estimated to grow further. Considering data from situations where HUM advanced for three days, in 218 of 347 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 4 (best 1 - 100 worst), indicating outstanding price growth. HUM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 7 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 82 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.711) is normal, around the industry mean (3.520). P/E Ratio (40.612) is within average values for comparable stocks, (126.353). HUM's Projected Growth (PEG Ratio) (1.304) is slightly higher than the industry average of (0.786). Dividend Yield (0.008) settles around the average of (0.009) among similar stocks. P/S Ratio (0.319) is also within normal values, averaging (0.569).
The Tickeron Profit vs. Risk Rating rating for this company is 91 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. HUM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock worse than average.
The Tickeron SMR rating for this company is 98 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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a company offers health insurance coverage and related services
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