Health insurance company Humana (NYSE: HUM) announced better-than-expected revenue in Q2 CY2026, with sales up 26.2% year on year to $40.87 billion. Its non-GAAP profit of $7.61 per share was 8.8% above analysts’ consensus estimates.

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Company Overview

With over 80% of its revenue derived from federal government contracts, Humana (NYSE: HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Humana grew its sales at a solid 12.8% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Humana’s annualized revenue growth of 15.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Humana reported robust year-on-year revenue growth of 26.2%, and its $40.87 billion of revenue topped Wall Street estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to grow 13.4% over the next 12 months, a slight deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and suggests the market sees success for its products and services.

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Adjusted Operating Margin

Humana was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 3.6% was weak for a healthcare business.

Looking at the trend in its profitability, Humana’s adjusted operating margin decreased by 2.3 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 1.3 percentage points. We still like Humana but would like to see some improvement in the future.

This quarter, Humana generated an adjusted operating margin profit margin of 3.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Humana’s EPS grew at an unimpressive 2.3% compounded annual growth rate over the last five years, lower than its 12.8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of Humana’s earnings can give us a better understanding of its performance. As we mentioned earlier, Humana’s adjusted operating margin was flat this quarter but declined by 2.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, Humana reported adjusted EPS of $7.61, up from $6.27 in the same quarter last year. This print beat analysts’ estimates by 8.8%. Over the next 12 months, Wall Street expects Humana’s full-year EPS to shrink by 30.7% from $17.20 to $11.93.

Key Takeaways from Humana’s Q2 Results

It was good to see Humana beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 2.3% to $357.51 immediately following the results.

Is Humana an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).