Humana Beats Estimates But Stock Drops 6% on Cautious Outlook

Humana, one of America's largest health insurance companies, just reported earnings that were better than expected — yet its stock still fell more than 6%. Here's why that happened.

What Humana does: The company sells health insurance, especially Medicare Advantage plans (privately run health plans for people 65 and older and people with disabilities). It also runs a healthcare services unit called CenterWell.

The good news — earnings beat expectations:

• Earnings per share (profit for each share of stock): $7.61 vs. $7.22 expected
• Revenue (total money coming in): $40.87 billion vs. $40.61 billion expected
• Net income (actual profit): $694 million, up from $545 million a year ago

The disappointment: Humana kept its 2026 profit target unchanged at at least $9 per share. Other insurers recently raised their forecasts, so investors were hoping Humana would too. When it didn't, they were let down — and sold the stock.

A key metric to understand — the medical benefit ratio: This shows how much of the money collected from customers gets paid back out for their medical care. Humana's was 91.2%, meaning about 91 cents of every dollar collected went to paying medical bills. A lower ratio is better for the company because it means more money left over as profit. Last year it was 89.9%, so this year is slightly worse.

Rising costs: Insurers have been struggling because people are getting care they delayed during the pandemic, and expensive drugs (like weight-loss drugs called GLP-1s) cost a lot. Humana said medical costs are now "more stable," but pharmacy (drug) costs remain "very elevated."

Looking ahead: Humana expects changes to its 2027 plans to improve profits, targeting a pretax margin (profit before taxes) of at least 3% by 2028.

Bottom line: Solid results, but a cautious outlook left investors wanting more.

This is an AI-generated summary. Read the original article at: https://www.cnbc.com/2026/07/29/humana-hum-earnings-q2-2026.html