NEW YORK, June 03, 2024 (GLOBE NEWSWIRE) -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Humana Inc. (“Humana” or the “Company”) (NYSE: HUM) and reminds investors of the August 2, 2024 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you suffered losses exceeding $100,000 investing in Humana stock or options between July 27, 2022 and January 24, 2024 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: www.faruqilaw.com/HUM.
Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: Defendants downplayed pressures on the Company’s adjusted EPS resulting from increased medical costs associated with pent-up demand for healthcare procedures (especially as COVID concerns abated) which, contrary to the Company’s assurances, resulted in increased utilization rates and costs. As a result of Defendants’ wrongful acts and omissions, and the significant decline in the market value of the Company’s common stock pursuant to the revelation of the fraud, Plaintiff and other members of the Class (defined below) have suffered significant damages.
Investors began to learn the truth about the pressures on the Company’s profitability on June 13, 2023, when UnitedHealth Group Inc. (“UnitedHealth”), one of Humana’s primary health insurer competitors, revealed that it was seeing “higher levels” of outpatient care activity and suggested that higher utilization rates were due to “pent-up demand or delayed demand being satisfied.” UnitedHealth further explained that it was “seeing very strong volumes” in certain areas, including ambulatory surgery, and an overall “higher number of cases that are being performed.” Given the similarities in Humana’s and UnitedHealth’s businesses, and the likelihood that Humana was also suffering from increased utilization and costs due to pent-up demand, the price of Humana common stock declined $57.63 per share, or more than 11%, from a close of $512.63 per share on June 13, 2023, to close at $455.00 per share on June 14, 2023.
Just three days later, on June 16, 2023, Humana confirmed that it also was seeing “higher than anticipated non-inpatient utilization trends, predominately in the categories of emergency room, outpatient surgeries, and dental services, as well as inpatient trends that have been stronger than anticipated in recent weeks, diverging from historical seasonality patterns.” Although the Company re-affirmed its full year insurance segment benefits expense ratio guidance (a key measure of profitability) of between 86.3% and 87.3%, it warned investors that it “now expects to be at the top end of this full year range”—i.e., reduced profitability. Additionally, Humana explained that it now “assume[d] it will continue to experience moderately higher-than expected trends for the remainder of the year.” On this news, the price of Humana common stock declined $18.20 per share, or almost 4%, from a close of $463.85 per share June 15, 2023, to close at $445.65 per share on June 16, 2023.
On January 18, 2024, Humana preliminarily released its financial results for the fourth quarter and full year 2023, and shocked investors by revealing that its benefits expense ratio had increased to approximately 91.4% for the fourth quarter of 2023 and approximately 88% for the full year 2023. As a result, the Company’s 2023 adjusted EPS were only $26.09 per share, or more than $2 per share less than what the Company had predicted in November 2023. In response to this announcement, the price of Humana common stock fell $35.78 per share, or approximately 8%, from a close of $447.76 per share on January 17, 2024, to close at $411.98 per share on January 18, 2024.
A week later, on January 25, 2024, the Company further shocked the market when it announced a loss for the fourth quarter of 2023, and stated that it expected the higher level of medical costs would persist for all of 2024. As a result, Humana revealed that it expected 2024 adjusted EPS of only $16 per share (a $10 per share decrease from 2023 and well below analysts’ expectations of $29 per share). In response to these revelations, the price of Humana common stock declined an additional $47.04 per share, or nearly 12%, from a close of $402.40 per share on January 24, 2024, to close at $355.36 per share on January 25, 2024.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Humana’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
To learn more about the Humana class action, go to www.faruqilaw.com/HUM or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
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