Date: December 4, 2025
Ticker: Humana Inc. (NYSE: HUM)
Humana’s share price spent most of 2025 behaving like a stressed-out cardiogram: sharp drops around guidance cuts and star-rating headlines, then sharp rebounds when the numbers looked less bad than feared.
As of early trading on December 4, Humana stock is changing hands in the mid‑$250s, down roughly 12% over the past year and about 18% below its 52‑week high of $315.35 reached in September. Year to date, the stock is barely positive, up just over 1%, and significantly lagging the SPDR S&P Health Care Services ETF, which has returned almost 20% over the same period. [1]
At the same time, Wall Street still sees upside and institutions continue to buy the dip — even as new legal and regulatory risks surface. Here’s how the story looks today, December 4, 2025, based on the latest news, forecasts and analyses.
Where Humana Stock Stands Today
A fresh analysis from Barchart on December 4 notes that Humana’s market capitalization sits around $30.9 billion, and the shares trade about 18.5% below their 52‑week high. Over the past three months, the stock is down 17.7%, and over the last 12 months it is off 11.8%, while the broader healthcare services ETF has gained double digits. Year to date, Humana is up just 1.3%, badly trailing its peer benchmark. [2]
Recent institutional trade data underscores how heavily owned the stock already is:
- Norges Bank (Norway’s sovereign wealth fund) acquired around 1.62 million shares in the second quarter, a stake worth about $397 million and representing 1.35% of the company. [3]
- OMERS Administration Corp increased its position by 25.1% in Q2.
- Mackenzie Financial Corp lifted its stake by 27.7% to just over 30,000 shares. [4]
Across the shareholder base, about 92% of Humana’s stock is owned by institutional investors and hedge funds. [5]
That heavy institutional footprint is one reason sentiment can swing so violently when guidance or regulatory headlines change.
The Core Business: Medicare Advantage at the Center
Humana operates through two main segments:
- Insurance – primarily Medicare Advantage (MA), Medicare Part D, Medicaid, and supplemental plans.
- CenterWell – payor‑agnostic healthcare services, including pharmacies, home health, and senior primary care clinics. [6]
The company is one of the largest Medicare Advantage insurers in the US. In 2024, Humana was the largest MA insurer in about a quarter of all US counties, and for roughly 21% of MA enrollees nationwide, Humana was the largest plan in their county. [7]
That concentration in government‑backed senior coverage is both a strength (huge scale, entrenched relationships) and a vulnerability (policy changes and star‑rating shifts hit hard).
2025 Has Been All About Star Ratings and Membership Cuts
Star ratings collapse
Humana’s biggest structural problem remains the abrupt collapse in Medicare Advantage star ratings:
- In an October 2024 filing, the company disclosed that the share of members in 4‑star or higher plans dropped from 94% for 2024 to just 25% for 2025. [8]
- At Q3 2025, management and industry analysts indicated that for the 2026 plan year, only about 20% of MA members are expected to be in 4‑star‑plus contracts, down from 25% in 2025. [9]
Because star ratings drive bonus payments from CMS with a one‑year lag, that ratings shock is dragging on earnings through 2026 and 2027, even if operational performance improves.
Humana tried to challenge the 2025 star ratings in court — and lost. In October, a federal judge in Texas rejected Humana’s bid to overturn the ratings, concluding that CMS had properly evaluated the company’s Medicare Advantage plans. The ruling noted that lower ratings could cost the company millions in bonus payments, and Humana’s shares fell about 3.6% on the news. [10]
Management now frames 2026–2027 as “recovery years” and targets a return to top‑quartile star performance by the 2027 plan year and more normalized earnings growth by 2028. [11]
Membership retrenchment
At the same time, Humana is deliberately shrinking in unprofitable geographies and benefit‑rich products:
- Earlier this year, the company said it expected to lose up to 500,000 individual Medicare Advantage members in 2025 as it exits plans and markets that lack a clear path to acceptable margins. It has already recaptured roughly 40% of those beneficiaries into redesigned offerings. [12]
- By Q3 2025, Humana revised its expected decline to about 425,000 MA members, a modest improvement as retention and new sales came in better than initially feared. [13]
Industry‑wide, large insurers are making similar “margin over membership” pivots, but Humana’s star‑rating hit makes its story particularly sensitive.
Q3 2025: Earnings Beat, Guidance Reaffirmed — But 2026 Is Fuzzy
Earnings and medical costs
On November 5, Humana reported Q3 2025 results that beat expectations:
- Adjusted EPS: $3.24 vs analyst estimates around $2.82–$2.91, though down about 22% year on year. [14]
- Revenue: approximately $32.6–32.7 billion, up about 11% from a year earlier and ahead of consensus. [15]
- Medical cost (benefit) ratio: ~91.1%, slightly above expectations but within the company’s guided range. [16]
The company reaffirmed its 2025 adjusted EPS guidance of about $17.00 per share and an Insurance segment benefit ratio around 90.1%–90.5%, while trimming GAAP EPS guidance to roughly $12.26 (from about $13.77) due primarily to non‑cash items such as intangible amortization and valuation adjustments on minority investments. [17]
Fundamentally, the insurance engine is still generating premium growth and staying roughly within its cost targets — it’s the future bonus revenue and star‑related margin drag that investors are worried about.
Market reaction: good quarter, bad optics
Despite the beat, Humana’s stock fell more than 7% on the day of the Q3 release. Reuters highlighted that investors were unnerved by the lack of detailed commentary on 2026 performance, especially around MA membership and profitability. [18]
That pattern — solid near‑term numbers overshadowed by multi‑year star‑rating and utilization questions — continues to define the narrative into December.
Strategy for 2026: Tighter Footprint, Richer Services
Humana’s playbook for the next two years has several moving parts:
- Rationalizing the MA footprint
The company plans to pull back from hundreds of counties and a few states for 2026, prioritizing markets where pricing and utilization trends support sustainable margins. By next year, Humana Medicare Advantage plans will be available in about 85% of US counties, down from 89%, and in 46 states, down from 48. [19] - Re‑engineering contract structure and stars
Humana is splitting its large, under‑performing MA contract H5216 into smaller contracts over time, aiming to reduce the risk of a single low‑rated contract dragging down revenue. Management says it would rather accept short‑term financial pain than “quick‑fix” crosswalks that might alienate members and jeopardize long‑term star improvement. [20] - Growing CenterWell and value‑based care
The CenterWell services segment is expanding senior primary‑care clinics through a joint venture that plans around 100 new centers, backed by up to $1.2 billion in capital. [21]
In Q3, CenterWell revenue rose about 17%, and the primary care arm served roughly 447,000 patients across 342 centers, though operating income declined due to higher expenses and risk‑adjustment changes. [22] - Technology and care‑management upgrades
Third‑party analyses point to Humana investing heavily in AI‑enabled call centers, medication adherence initiatives, and in‑home plus virtual care models to improve margins and member experience over time. [23]
In other words, Humana is shrinking where it can’t earn its cost of capital, while betting on primary care, pharmacy and operational efficiency to rebuild earnings power once the star‑rating drag rolls off.
Fresh December Headlines: Institutional Buying and New Legal Scrutiny
More “smart money” stepping in
Beyond Norges Bank and OMERS, a string of recent 13F‑linked news items shows multiple asset managers building or adjusting positions in Humana in late November and early December, including Ceredex, Quadrature Capital, and several pension and wealth‑management firms. [24]
MarketBeat aggregates these moves alongside consensus estimates and notes that, despite all the volatility, analysts on average still project double‑digit EPS and revenue growth over a multi‑year horizon. [25]
Berman Tabacco investigation
On December 2, law firm Berman Tabacco announced an investigation into potential stockholder claims related to Humana. The investigation centers on allegations that between 2016 and 2021 the company paid illegal kickbacks — potentially totaling as much as $250 million — to SelectQuote and other brokers to steer customers into Humana’s Medicare plans. The allegations stem from a whistleblower complaint joined by the U.S. Attorney’s Office in Massachusetts. [26]
The firm is probing whether Humana’s board or senior officers breached fiduciary duties. No liability has been established, but the probe adds another layer of legal and reputational risk on top of the star‑ratings litigation.
Coverage of new technologies
Meanwhile, a very different kind of headline shows how deeply Humana is embedded in Medicare Advantage benefit design. On December 3, Lifeward (formerly ReWalk Robotics) announced that a Humana Medicare Advantage plan granted prior authorization coverage for its ReWalk 7 personal robotic exoskeleton. Together with UnitedHealthcare, which approved the device earlier, the two MA giants now represent roughly 47% of all MA enrollees with potential access under prior authorization. [27]
Financially, this is not a needle‑mover for Humana today, but it underscores the company’s role as a gatekeeper for emerging high‑cost technologies — a theme that will matter more as value‑based care and specialized devices proliferate.
How Wall Street Values Humana Right Now
Street price targets and ratings
Different data providers show slightly different numbers, but the broad picture is consistent:
- MarketBeat’s compilation of analyst forecasts shows an average 12‑month price target near $296 per share, with a range from roughly $215 to $347. That implies around 15–16% upside from recent prices in the mid‑$250s. [28]
- Based on one MarketBeat‑summarized survey, the stock currently carries a “Hold” consensus, with about eight Buy ratings, nine Hold ratings and two Sell ratings. [29]
- Barchart notes a slightly different set, describing the consensus as “Moderate Buy” among 27 analysts, with a mean target around $283.67, or about 10% above current levels. [30]
Zacks, focusing more on earnings revisions, currently rates Humana as a Rank #2 (Buy) after the Q3 earnings beat, while reminding investors that the Medical HMOs industry is sitting in the bottom quartile of all sectors by its ranking methodology — a sector headwind even for stronger operators. [31]
Intrinsic value models
Independent valuation platforms are also trying to make sense of the post‑sell‑off price:
- A Simply Wall St analysis published December 3 pegs a fair value around $286–287 per share, implying mid‑teens upside from the recent close near $257. That piece notes that Humana’s share price has fallen about 13% over the last month, roughly 22% over three months, and about 15–16% over the last year, raising the question of whether the market has overshot on pessimism. [32]
- A narrative‑driven valuation shared via Sahm Capital uses a fair‑value estimate of about $288.46 when the stock traded near $234 in mid‑November, describing Humana as roughly 19% undervalued if operational improvements materialize. [33]
- A more aggressive discounted cash‑flow model cited on Webull even suggests a fair value over $660 per share — implying the stock could be more than 50% undervalued — but that scenario assumes robust free‑cash‑flow growth and a much higher “fair” earnings multiple than the market is currently willing to pay a heavily regulated insurer. [34]
Across these models, the common thread is that Humana screens as somewhat undervalued relative to consensus estimates and many intrinsic‑value frameworks — but only if investors are willing to look through two difficult years of star‑related earnings drag and elevated medical utilization.
Key Risks Investors Are Watching
From recent coverage and filings, several risks stand out:
- Medicare Advantage policy and star‑rating risk
- Lower star ratings have already reduced bonus payments for 2025 and 2026 and are likely to weigh on 2027 as well. [35]
- Humana has now lost multiple legal challenges to the rating methodology, narrowing its options to operational improvements and contract restructuring rather than courtroom relief. [36]
- Medical cost trend uncertainty
- Management expects mid‑single‑digit medical cost inflation and low‑double‑digit pharmacy trend in 2026, with utilization already running higher than pre‑pandemic baselines in seniors. [37]
- If those trends run hotter than forecast, margin recovery could be delayed further.
- Legal and compliance risk
- The alleged broker kickback scheme now being investigated by Berman Tabacco, tied to a whistleblower case joined by federal prosecutors, could ultimately result in fines, settlements or governance changes, depending on how the facts and law play out. [38]
- Political and funding risk
- Medicare Advantage remains a political lightning rod. Changes to ACA subsidies, MA benchmark formulas or risk‑adjustment rules can move the entire sector, as seen in periodic sell‑offs tied to policy headlines throughout 2025. [39]
- Execution risk on CenterWell and diversification
- Expanding primary care and services can diversify revenue and deepen the moat — but it also requires capital, integration and operating discipline at a time when the core MA business is under pressure. [40]
Is Humana Stock a Buy, Sell or Hold After the 2025 Sell‑Off?
Public commentary today falls into three broad camps:
- The cautious bulls point to:
- Humana’s entrenched position as the #2 Medicare Advantage player.
- An aging US population that structurally supports MA growth.
- A clear (if bumpy) recovery roadmap that envisions EPS stabilizing by 2027 and growing again by 2028 as star ratings improve. [41]
- Valuation metrics and fair‑value models that generally suggest modest undervaluation.
- The skeptics focus on:
- Multi‑year earnings drag from star‑rating downgrades and membership cuts.
- Ongoing regulatory overhang and the risk that CMS and Congress tighten MA payments further.
- New legal clouds from alleged broker kickbacks.
- Humana’s meaningful underperformance vs healthcare peers despite its scale.
- The fence‑sitters (including many analysts) effectively land on a “Hold” view: the stock may offer upside if management executes the turnaround and the policy environment doesn’t worsen, but the near‑term risk/reward is finely balanced.
From a portfolio‑construction standpoint, Humana has become a high‑beta bet on Medicare Advantage policy and execution, rather than the “defensive compounder” many investors once viewed it as. Any investment decision needs to align with an investor’s risk tolerance, time horizon and broader diversification.
Bottom Line
As of December 4, 2025, Humana stock sits in a tension zone:
- The Q3 2025 earnings beat and reaffirmed 2025 adjusted EPS guidance show that the core operations are still functioning. [42]
- The star‑ratings shock, membership retrenchment and legal overhang make 2026–2027 a messy bridge to that longer‑term earnings recovery.
- Wall Street price targets and independent valuations mostly suggest single‑ to low‑double‑digit percentage upside from current levels, but with considerable uncertainty around the earnings path.
- Institutional investors continue to accumulate shares, even as plaintiff lawyers sharpen their knives.
For now, Humana remains a large‑cap insurer in the middle of a complex reboot. Whether today’s price turns out to be a buying opportunity or a value trap will depend largely on how well management can navigate the next two enrollment cycles — and how generous Washington chooses to be with Medicare Advantage.
References
1. www.barchart.com, 2. www.barchart.com, 3. www.marketbeat.com, 4. www.marketbeat.com, 5. www.marketbeat.com, 6. www.barchart.com, 7. www.kff.org, 8. www.healthtechnerds.com, 9. www.healthcaredive.com, 10. www.reuters.com, 11. www.healthtechnerds.com, 12. www.beckerspayer.com, 13. www.reuters.com, 14. www.nasdaq.com, 15. www.nasdaq.com, 16. www.reuters.com, 17. policy.humana.com, 18. www.reuters.com, 19. www.kiplinger.com, 20. www.healthcaredive.com, 21. humana.gcs-web.com, 22. www.healthcaredive.com, 23. www.sahmcapital.com, 24. www.marketbeat.com, 25. www.marketbeat.com, 26. www.globenewswire.com, 27. www.stocktitan.net, 28. www.marketbeat.com, 29. www.marketbeat.com, 30. www.barchart.com, 31. www.nasdaq.com, 32. simplywall.st, 33. www.sahmcapital.com, 34. www.webull.com, 35. www.healthtechnerds.com, 36. www.reuters.com, 37. www.investing.com, 38. www.globenewswire.com, 39. www.beckerspayer.com, 40. humana.gcs-web.com, 41. www.healthtechnerds.com, 42. www.reuters.com
