Is Humana, Inc. overvalued or undervalued?

As of 30 June 2025, Humana, Inc. has moved from expensive to very expensive, indicating a significant shift in its valuation outlook. The company is considered overvalued, with a P/E ratio of 26, which is substantially higher than its peer Centene Corp., which has a P/E of 6.94. Additionally, Humana's EV to EBITDA stands at 37.39, again reflecting a premium compared to Centene's 11.91, further supporting the overvaluation assessment. The price to book value is 2.48, suggesting that investors are paying a high price relative to the company's net assets.
In terms of recent performance, Humana has underperformed compared to the S&P 500, with a 1-year return of -15.99% versus the S&P 500's 17.14%, and a staggering 3-year return of -47.01% compared to the S&P 500's 70.41%. This trend reinforces the notion that the stock is overvalued in the current market context.