<div id="readability-page-1"><div><ul> <li>If you are looking at Humana and wondering whether the recent share price puts it in bargain territory or not, it helps to start with the facts behind the current valuation story.</li> <li>Humana's share price most recently closed at US$165.43, with returns of a 7.7% decline over 7 days, a 5.7% decline over 30 days, a 37.5% decline year to date, a 33.7% decline over 1 year, a 65.5% decline over 3 years, and a 57.7% decline over 5 years.</li> <li>Recent headlines around Humana have focused on how the share price performance compares with broader healthcare names and what that might imply for investor risk appetite. This context is prompting some investors to reassess whether the current level reflects sentiment, fundamentals, or a mix of both.</li> <li>On Simply Wall St's 6 point valuation checklist, Humana has a value score of 5, which means it screens as undervalued on five of those checks. Below, we look at what that actually means using different valuation approaches, then finish with a framework that many investors find useful for understanding fair value in context.</li> </ul> Find out why Humana's -33.7% return over the last year is lagging behind its peers. <h3>Approach 1: Humana Discounted Cash Flow (DCF) Analysis</h3> A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today’s value. For Humana, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $142.21m. Based on analyst inputs for the next few years and then Simply Wall St extrapolations beyond that, projected free cash flow rises into the multi billion range, reaching an estimated $4.66b by 2030. The ten year projections, all in dollars, are discounted back to today using Humana specific assumptions to reflect risk and the time value of money. Pulling those discounted cash flows together, the model arrives at an estimated intrinsic value of about $965.79 per share, compared with the recent share price of $165.43. That implies the stock screens as 82.9% undervalued under this DCF framework. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests Humana is undervalued by 82.9%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks. <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTE0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTE0"/><figcaption>HUM Discounted Cash Flow as at Mar 2026</figcaption></figure> Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Humana. <h3>Approach 2: Humana Price vs Earnings</h3> For profitable companies, the P/E ratio is a straightforward way to connect what you pay per share with the earnings the business is currently generating. It helps you see how many dollars investors are paying for each dollar of earnings today. In general, higher growth expectations or lower perceived risk can support a higher P/E, while slower expected growth or higher risk usually line up with a lower, more cautious multiple. There is no single “right” P/E, which is why context matters. Humana currently trades on a P/E of 16.72x. That sits below the Healthcare industry average P/E of 22.07x and below the peer group average of 20.89x, which suggests the market is applying a lower multiple than these broad benchmarks. Simply Wall St’s Fair Ratio is a proprietary estimate of what P/E might be appropriate for Humana once you factor in its earnings growth profile, industry, profit margins, market cap and key risks. Because it is tailored to the company, it can be more informative than a simple comparison with peers or the overall industry, which may have very different characteristics. For Humana, the Fair Ratio is 33.23x versus the current 16.72x, which indicates that the shares screen as undervalued on this P/E based approach. Result: UNDERVALUED <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTAzLTE0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTAzLTE0"/><figcaption>NYSE:HUM P/E Ratio as at Mar 2026</figcaption></figure> P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies. <h3>Upgrade Your Decision Making: Choose your Humana Narrative</h3> Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple tool on Simply Wall St’s Community page that lets you attach your own story about Humana to concrete numbers like future revenue, earnings, margins and a fair value. You can then compare that fair value with today’s price as new news or earnings arrive. One investor, for example, uses a higher fair value of US$348.00 built on faster growth and stronger margins. Another uses a lower fair value of US$146.00 based on tighter Medicare Advantage economics. Both views update automatically as fresh information comes in so you can see which story you agree with and how that lines up against the current share price. For Humana, however, we will make it easy for you with previews of two leading Humana Narratives: These are investor-written scenarios that tie specific assumptions on regulation, growth, margins and fair value back to concrete numbers. One leans more constructive on value at today’s price, and the other focuses on ongoing pressure around Medicare Advantage and earnings risk. 🐂 Humana Bull Case Fair value in this narrative: US$212.87 per share Undervalued versus the last close of US$165.43: about 22.3% Revenue growth assumption: 8.70% <ul> <li>Sees Humana operating in a tougher regulatory climate where Medicare Advantage is under closer scrutiny, especially on risk adjustment and prior authorization, with less room for documentation errors.</li> <li>Frames compliance as a core operating pillar, where data integrity, clinical justification and auditable systems are essential to managing audit risk and potential repayments.</li> <li>Argues that large scale, if paired with stronger internal controls and proactive engagement with regulators, can support resilience even as oversight tightens across the industry.</li> </ul> 🐻 Humana Bear Case Fair value in this narrative: US$146.00 per share Overvalued versus the last close of US$165.43: about 13.3% Revenue growth assumption: 9.10% <ul> <li>Highlights Humana’s heavy exposure to Medicare Advantage and the risk that policy changes, budget pressure and competition could weigh on reimbursement and earnings stability.</li> <li>Points to rising healthcare costs, higher utilization and tech enabled competitors as possible sources of margin pressure if cost savings and efficiencies do not keep pace.</li> <li>Uses one of the more cautious analyst fair value estimates, built on modest revenue growth, relatively low long term profit margins and a lower future P/E multiple to reflect execution and regulatory risk.</li> </ul> Do you think there's more to the story for Humana? Head over to our Community to see what others are saying! <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/quote-price/query-ZGF0ZT0yMDI2LTAzLTE0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/9e003bfe-0b04-4c97-b202-bcae7c583053/chart/quote-price/query-ZGF0ZT0yMDI2LTAzLTE0"/><figcaption>NYSE:HUM 1-Year Stock Price Chart</figcaption></figure> This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.<div><h3>Valuation is complex, but we're here to simplify it.</h3>Discover if Humana might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free Analysis</div></div></div>

Humana's share price has significantly declined, closing at $165.43, with a 37.5% drop year-to-date. Despite this, a Discounted Cash Flow analysis suggests it is undervalued by 82.9%, with an estimated intrinsic value of $965.79 per share. Additionally, its P/E ratio of 16.72x is below industry averages, indicating further undervaluation. Investors are reassessing Humana's valuation amidst broader healthcare market trends, with varying fair value estimates based on growth expectations and market conditions.

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Is It Time To Reconsider Humana (HUM) After Its Steep Share Price Slide?