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

In the latest trading session, Humana (HUM) closed at $513.34, marking a +0.69% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.12%. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, lost 4.09%.

Coming into today, shares of the health insurer had lost 3.62% in the past month. In that same time, the Medical sector lost 2.13%, while the S&P 500 gained 3.98%.

Investors will be hoping for strength from Humana as it approaches its next earnings release. The company is expected to report EPS of $8.92, up 2.88% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $25.7 billion, up 8.6% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $28.25 per share and revenue of $102.2 billion. These totals would mark changes of +11.93% and +10.04%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for Humana. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% lower within the past month. Humana is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Humana is holding a Forward P/E ratio of 18.05. This represents a premium compared to its industry's average Forward P/E of 16.86.

It is also worth noting that HUM currently has a PEG ratio of 1.33. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - HMOs industry currently had an average PEG ratio of 1.08 as of yesterday's close.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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