Humana Inc. (HUM) Fair Value & PE Analysis
Medical - Healthcare Plans · NYSE
Current Price
$409.85
PE Ratio (TTM)
38.5x
Intrinsic Value
$399.34
-2.6% margin of safety
What Is Humana Inc.'s Fair Value?
As of 2026-09-11, applying a 38.6x earnings multiple to Humana Inc.'s (HUM) earnings per share of $10.63 yields a fair value estimate of $399.34 per share, versus a market price of $409.85.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $340.21 to $466.19. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · HUM intrinsic value (DCF view)
Is Humana Inc. (HUM) Overvalued?
At $409.85, HUM trades about 2.6% above its PE-based fair value estimate, a modest premium over the applied earnings multiple. Check whether earnings growth justifies the price.
COMPETITIVE MOAT
↑Government Program Expertise
Humana's deep experience navigating complex government healthcare programs like Medicare Advantage provides a significant barrier to entry for new competitors. This expertise translates into operational efficiency and regulatory compliance.
↑Scale and Network Effects
As a large health insurer, Humana benefits from significant scale in negotiating provider rates and managing risk. Its extensive member base also creates network effects, making it more attractive to providers and members alike.
↑Member Loyalty and Switching Costs
While not insurmountable, members in government programs often face inertia and complexity in switching plans. Humana's established presence and brand recognition contribute to member retention and create implicit switching costs.
INVESTMENT RISKS
↓Discontinuation of Government Plans
Humana's decision to drop certain Medicare Advantage plans signals potential future strategic shifts and member attrition. This could lead to a loss of revenue and market share in specific regions.
↓Healthcare Cost Inflation
Rising healthcare costs can outpace premium increases, squeezing insurer margins. Humana's profitability is sensitive to the overall trend of medical cost inflation.
↓Operational Execution and Integration
The HealthStream deal highlights Humana's efforts to improve caregiver retention. However, the success of such initiatives and the integration of new strategies are critical for operational efficiency and member satisfaction.
Base case
HUM base case PE valuation
Intrinsic Value
$399.34
Margin of safety
-2.6%
Expected annual return
-0.5%
Base case assumptions: 6.6% annual earnings growth, 38.56x target PE, 10% discount rate, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the HUM PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Humana Inc. respond.
Open PE Calculator for HUMCompany Overview
Humana Inc., a prominent health and well-being enterprise, operates across the United States through its various subsidiary companies. Its operational structure is divided into three main segments: Retail, Group and Specialty, and Healthcare Services. The firm provides a wide array of medical and supplementary insurance plans directly to individual consumers. Furthermore, Humana collaborates with government entities; it holds a contract with the Centers for Medicare and Medicaid Services (CMS) to manage the Limited Income Newly Eligible Transition (LI NET) prescription drug program. The company also secures agreements with numerous states to deliver Medicaid, dual-eligible, and long-term care support benefits. For employer groups and individuals, Humana furnishes fully insured commercial medical and specialized health coverage, which encompasses dental, vision, and other ancillary health benefits. They additionally offer administrative services only (ASO) solutions and extend support to military personnel through contracts like the TRICARE T2017 East Region. Beyond insurance products, the company delivers comprehensive healthcare services directly. These include pharmacy management, provider network services, and a suite of home-based solutions such as home health care, serving both its own health plan enrollees and external clients. By the close of 2021 (December 31), Humana's reach extended to approximately 17 million individuals enrolled in its medical benefit plans and an additional 5 million utilizing its specialized product offerings. Established in 1961, Humana Inc. maintains its corporate headquarters in Louisville, Kentucky.
Financial Metrics — HUM PE Stock Valuation Data
PE Ratio (TTM)
38.5x
PEG Ratio
n/m
Earnings Yield
2.59%
ROE (TTM)
6.9%
Revenue/Share (TTM)
$1211.98
Dividend Yield
0.86%
Debt/Equity
0.74x
Frequently Asked Questions
What is the PE ratio of HUM?
The trailing twelve-month PE ratio of HUM reflects how much investors pay per dollar of Humana Inc.'s earnings. This metric is most useful when compared to Medical - Healthcare Plans peers and the company's own historical range.
Is HUM overvalued based on PE ratio?
HUM's PE of 38.5x combined with a PEG ratio of -2.08 provides a growth-adjusted perspective. HUM has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Medical - Healthcare Plans, a DCF analysis may be more appropriate.
How do I value HUM stock using PE ratio?
To value Humana Inc. using PE: (1) Compare the current PE (38.5x) against the Medical - Healthcare Plans median to assess relative pricing, (2) check the PEG ratio (-2.08) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of HUM?
HUM's PEG ratio is -2.08, calculated by dividing the PE ratio (38.5x) by the expected earnings growth rate. Because HUM has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for HUM stock valuation?
PE ratio gives a quick relative read — how HUM is priced versus Medical - Healthcare Plans peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See HUM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value HUM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.