Humana stock was slumping Wednesday as investors zeroed in on an uptick in medical costs and looked past a second-quarter earnings beat.

The health insurer posted adjusted earnings of $7.61 a share, beating the $7.26 analysts had expected. Humana also reported nearly $40.9 billion in quarterly revenue, up from $32.4 billion a year ago and ahead of calls for $40.6 billion.

The insurer's second-quarter medical cost ratio came to 91.2%, compared with 89.7% a year ago. Analysts were expecting 91.1%. A lower MCR means an insurer spent less on patient medical claims, with these savings dropping to its bottom line as profit.

The insurer also reaffirmed, rather than raised, its full-year adjusted earnings guidance on the back of its latest numbers. Humana sees earnings of at least $9 a share for the year.

"The first half of the year went well, and we're right where we said we'd be at Investor Day last year," CEO Jim Rechtin said in a statement. The market wasn't as upbeat. Humana stock sank 8.7% in premarket trading Wednesday as S&P 500 futures rose 0.3%.

This is breaking news. Read a preview of Humana's earnings below and check back for updates.

Humana is facing high expectations when it reports earnings Wednesday. The stock has soared nearly 52% this year, benefiting from growing investor confidence in managed care companies that serve seniors in the federal Medicare Advantage program.

Prior to this year, shares of the large health insurer were pummeled by rising medical costs associated with Medicare. But the sector turned a corner this spring. Insurers delivered solid results in the first quarter, showing Wall Street that costs were becoming more manageable.

Humana's stock gains have outpaced those of Medicare Advantage peers UnitedHealth Group, which is up nearly 30% in 2026, and CVS Health, which has gained almost 38%.

Unlike those companies, Humana is much more concentrated in Medicare Advantage, making it effectively a pure play on that market.

On Wednesday, Wall Street expects adjusted earnings per share of $7.26, up from $6.27 in the year-earlier quarter. Quarterly revenue is expected to total $40.57 billion, up from $32.4 billion a year ago.

Humana's medical cost ratio, a measure of how much premium revenue insurers spend on medical care, is forecast to be 91.1%, versus 89.7% a year ago.

Despite Humana's gains, analysts overall are cautious on the stock. Its average rating is a Hold, according to FactSet, with an average target price of $351.79, below Humana's share price of $388.71 at Tuesday's close.

The insurer faces headwinds this year. Humana lost eligibility for certain Medicare bonus payments in 2026 after key health plans failed to achieve a four-star rating from the federal government. Humana executives have said they're working to recover those ratings in time for bonus year 2028.

Raymond James is bullish on Humana but says that earnings upside could be largely priced in.

"We do think 2Q will be better than expected, but with the recent run in the stock and valuation, we think much of the earnings upside potential outside of the Stars recovery is priced into the stock," analysts said in a client note this month.