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Humana (HUM) Outpaces Stock Market Gains: What You Should Know

Humana (HUM) closed at $509.83 in the latest trading session, marking a +1.02% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.5%, and the tech-heavy Nasdaq lost 5.66%.

Prior to today's trading, shares of the health insurer had lost 4.71% over the past month. This has lagged the Medical sector's loss of 2.88% and the S&P 500's gain of 3.44% in that time.

Humana will be looking to display strength as it nears its next earnings release. In that report, analysts expect Humana to post earnings of $8.92 per share. This would mark year-over-year growth of 2.88%. Our most recent consensus estimate is calling for quarterly revenue of $25.7 billion, up 8.6% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $28.25 per share and revenue of $102.2 billion, which would represent changes of +11.93% and +10.04%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for Humana. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% lower. Humana is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Humana is holding a Forward P/E ratio of 17.86. For comparison, its industry has an average Forward P/E of 16.86, which means Humana is trading at a premium to the group.

It is also worth noting that HUM currently has a PEG ratio of 1.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.07 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Humana Inc. (HUM) : Free Stock Analysis Report

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