What does free cash flow margin mean?

How much real, spendable cash each sales dollar generates after reinvestment.

How do you interpret free cash flow margin?

A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.

How does free cash flow margin compare across companies?

Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.

Humana HUM Free cash flow margin

Discontinued — last reported Q1 '21

Free cash flow margin at other companies

CVS HealthCVS

1.8%—

UnitedHealth GroupUNH

4.4%-1.7pp

HCA HealthcareHCA

10.4%+3.5pp

CenteneCNC

3.6%+2.7pp

Elevance HealthELV

3.3%+1.3pp

Molina HealthcareMOH

0.6%—

Other financials

Income statement

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Revenue$39.6B+23.5%

Operating income$1.8B-12.9%

Net income$1.2B-4.7%

EPS (diluted)$9.83-4.6%

Balance sheet

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Cash & equivalents$5.0B+16.5%

Total debt$14.0B+5.2%

Total equity$18.6B+4.7%

Total assets$55.3B+8.5%

Cash flow

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Operating cash flow$1.3B+279%

CapEx$121.0M+27.4%

Free cash flow$1.1B+380%

Valuation

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Market cap$43.3B-34.8%

Enterprise value$52.34B-27.2%

P/E13.7×-1.7×

P/S0.3×-0.2×

Profitability

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Operating margin2.7%-1.7pp

Net margin3%-0.1pp

Returns & leverage

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Return on equity18.2%+0.9pp

Debt / equity0.8×0.0×

Current ratio1.8×-0.1×

Where this comes from

Calculated from Humana’s reported figures.

free cash flow/total revenue=4.2%

Based on trailing twelve months.

The official record: Humana’s 10-Q, filed April 27, 2022, on SEC EDGAR. View the filing →

Questions, answered.

What does free cash flow margin mean?: How much real, spendable cash each sales dollar generates after reinvestment.
How do you interpret free cash flow margin?: A high and rising FCF margin is the hallmark of a cash-generative business. Persistent gaps between net margin and FCF margin warrant a look at working capital or capital intensity.
How does free cash flow margin compare across companies?: Strong cross-company quality signal; capital-light compounders post structurally higher FCF margins than asset-heavy peers.