Can Humana Stock Recover If Markets Fall?
Humana (HUM) stock is down 21.1% in a day. The recent slide reflects renewed concerns around Medicare Advantage profitability due to an almost-flat CMS rate proposal, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Humana stands today.
- Size: Humana is a $25 Bil company with $126 Bil in revenue currently trading at $207.93.
- Fundamentals: Last 12 month revenue growth of 9.9% and operating margin of 0.0%.
- Liquidity: Has Debt to Equity ratio of 0.5 and Cash to Assets ratio of 0.44
- Valuation: Humana stock is currently trading at P/E multiple of 19.4 and P/EBIT multiple of 10.6
- Has returned (median) 49% within a year following sharp dips since 2010. See HUM Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced. For details, see Buy or Sell HUM Stock
That brings us to the key consideration for investors worried about this fall: how resilient is HUM stock if markets turn south? This is where our downturn resilience framework comes in. Suppose HUM stock falls another 20-30% to $146 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- HUM stock fell 24.6% from a high of $563.00 on 3 November 2022 to $424.29 on 13 July 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $524.21 on 16 October 2023 , and currently trades at $207.93
| HUM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -24.6% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- HUM stock fell 43.6% from a high of $380.20 on 13 February 2020 to $214.43 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 30 April 2020
| HUM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -43.6% | -33.9% |
| Time to Full Recovery | 38 days | 148 days |
2018 Correction
- HUM stock fell 34.2% from a high of $353.98 on 7 November 2018 to $232.89 on 17 April 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 16 December 2019
| HUM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.2% | -19.8% |
| Time to Full Recovery | 243 days | 120 days |
2008 Global Financial Crisis
- HUM stock fell 78.4% from a high of $86.98 on 14 January 2008 to $18.77 on 5 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 November 2011
| HUM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -78.4% | -56.8% |
| Time to Full Recovery | 977 days | 1,480 days |
Feeling jittery about HUM stock? Consider portfolio approach.
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