Humana Inc. (HUM) DCF Valuation
Transparent DCF models put Humana Inc. (HUM)'s fair value in a range of $244.55 – $729.66 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $363.18 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $363.18, the market is pricing in roughly +9.4%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -17.2%. The price is betting on acceleration above its track record.
Current Price
$363.18
Fair-Value Range
$244.55 – $729.66
Market-Implied Growth
+9.4%/yr
vs -17.2% 5Y actual
HUM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $2.3B · 0.12B shares · net debt $8.3B
Estimated Fair Value
$244.55
-32.7% vs $363.18
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $363.18; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $321 | $341 | $364 | $393 | $427 |
| 9.0% | $266 | $279 | $295 | $314 | $335 |
| 10.0% | $224 | $234 | $245 | $257 | $272 |
| 11.0% | $191 | $198 | $206 | $215 | $225 |
| 12.0% | $164 | $170 | $176 | $182 | $190 |
About Humana Inc.
Humana Inc., a prominent health and well-being enterprise, operates across the United States through its various subsidiary companies. Its operational structure is divided into three main segments: Retail, Group and Specialty, and Healthcare Services. The firm provides a wide array of medical and supplementary insurance plans directly to individual consumers. Furthermore, Humana collaborates with government entities; it holds a contract with the Centers for Medicare and Medicaid Services (CMS) to manage the Limited Income Newly Eligible Transition (LI NET) prescription drug program. The company also secures agreements with numerous states to deliver Medicaid, dual-eligible, and long-term care support benefits. For employer groups and individuals, Humana furnishes fully insured commercial medical and specialized health coverage, which encompasses dental, vision, and other ancillary health benefits. They additionally offer administrative services only (ASO) solutions and extend support to military personnel through contracts like the TRICARE T2017 East Region. Beyond insurance products, the company delivers comprehensive healthcare services directly. These include pharmacy management, provider network services, and a suite of home-based solutions such as home health care, serving both its own health plan enrollees and external clients. By the close of 2021 (December 31), Humana's reach extended to approximately 17 million individuals enrolled in its medical benefit plans and an additional 5 million utilizing its specialized product offerings. Established in 1961, Humana Inc. maintains its corporate headquarters in Louisville, Kentucky.
- Sector
- Healthcare
- Industry
- Medical - Healthcare Plans
- CEO
- James A. Rechtin