10 Worst Performing Healthcare Stocks in 2024

3. Humana Inc. (NYSE:HUM)

Total YTD Return: -41.37%’ 

Humana Inc. (NYSE:HUM) is a key player in the health insurance industry, offering health and wellness services to millions of Americans. The company provides various insurance products, including Medicare Advantage plans, prescription drug coverage, and commercial health insurance, primarily serving individuals, especially seniors, and employers seeking group health coverage.

Humana Inc. (NYSE:HUM) focuses on leveraging its healthcare delivery and services infrastructure to improve outcomes and reduce costs. Its consistently high Star ratings in Medicare Advantage plans provide a competitive advantage, attracting beneficiaries and strengthening its market position. Wall Street believes that enhancing this infrastructure is crucial for Humana to differentiate itself in a competitive market and tackle ongoing challenges.

In Q3 2024, Humana Inc. (NYSE:HUM) reported earnings per share (EPS) of $4.16, surpassing expectations of $3.40. Despite this positive earnings surprise, the underlying revenue growth has been modest. The company anticipates a year-over-year growth rate of approximately 5% in individual Medicare Advantage (MA) membership, which reflects disciplined pricing strategies and increased marketing investments. However, the overall profitability remains under scrutiny due to escalating medical costs and operational inefficiencies, placing the company among the worst performing stocks.

The medical loss ratio (MLR) has remained stable but is influenced by higher specialty drug costs and other non-inpatient utilization trends. Analysts have noted that while Humana Inc. (NYSE:HUM)’s claims development aligns with expectations, the company faces significant headwinds from rising healthcare costs that could pressure margins moving forward.

As tracked by the Insider Monkey database, 60 hedge fund holders held shares in Humana Inc. (NYSE:HUM) in Q3 2024, with Eagle Capital Management being the largest stakeholder with shares worth $1.28 billion.