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Humana Inc (NYSE:HUM)
Intrinsic Value (DCF Projected)
$172.82 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Humana Inc's DCF projected intrinsic value is $172.82. The stock price of Humana Inc is $137.69. Therefore, Humana Inc's Price to Intrinsic Value (DCF Projected) Ratio of today is 0.8.

HUM' s 10-Year Price to Intrinsic Value (DCF Projected) Range
Min: 0.3   Max: 1.93
Current: 0.79

0.3
1.93

During the past 13 years, the highest Price to Intrinsic Value (DCF Projected) Ratio of Humana Inc was 1.93. The lowest was 0.30. And the median was 0.68.

HUM's Price to Intrinsic Value (DCF Projected) is ranked higher than
89% of the 47 Companies
in the Global Health Care Plans industry.

( Industry Median: 1.20 vs. HUM: 0.79 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Humana Inc's FCF(6 year avg) is calculate as

Humana Inc Quarterly Data

201206201209201212201303201306201309201312201403201406201409
total_freecashflow 607-1,45399322761,024-147565-310809
200912201003201006201009201012201103201106201109201112201203
total_freecashflow 2117162731,148-1177251032,833-1,9272,260
200812200903200906200909
total_freecashflow 2156118901

Add all the Free Cash Flow together and divide 6 will get Humana Inc's FCF(6 year avg) = $1,509.20.

Humana Inc's DCF Projected Intrinsic Value for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Sep14)*0.8)/Shares Outstanding
=(12.5226157651*1509.19533333+10125*0.8)/156.230
=172.82

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Humana Inc's Price to DCF Projected Intrinsic Value Ratio for today is calculated as

Price to DCF Projected Intrinsic Value=Share Price/DCF Projected Intrinsic Value
=137.69/172.816189425
=0.80

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value (DE), Intrinsic Value (DCF), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Humana Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
iv_dcf_share 18.5328.1054.7668.8683.87102.09133.89161.40165.48158.12

Humana Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
iv_dcf_share 185.43173.77165.48147.02145.51177.08158.12166.89167.30172.82
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