Why Humana (HUM) Shares Are Getting Obliterated Today

What Happened?

Shares of health insurance company Humana (NYSE:HUM) fell 8.2% in the afternoon session after the company reported mixed fourth-quarter results: Earnings and adjusted EBITDA missed Wall Street's expectations. Sales were also underwhelming, exceeding expectations by a narrow margin. Declining customer count didn't help the growth outlook, and the company expects individual Medicare Advantage annual membership to fall by roughly 550,000 in 2025 compared to the previous year. While full-year guidance was ahead of consensus forecasts, it also implied a significant growth deceleration. Overall, this was a challenging quarter.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Humana? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Humana’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Humana is down 3.4% since the beginning of the year, and at $244 per share, it is trading 39.7% below its 52-week high of $404.52 from July 2024. Investors who bought $1,000 worth of Humana’s shares 5 years ago would now be looking at an investment worth $683.15.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.