UnitedHealth (UNH)
Market Price (3/21/2026): $278.07 | Market Cap: $252.5 BilSector: Health Care | Industry: Managed Health Care
UnitedHealth (UNH)
Market Price (3/21/2026): $278.07Market Cap: $252.5 BilSector: Health CareIndustry: Managed Health Care
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.0%, Dividend Yield is 3.2%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.0%, FCF Yield is 6.4% | Weak multi-year price returns2Y Excs Rtn is -68%, 3Y Excs Rtn is -104% | Key risksUNH key risks include [1] intense regulatory scrutiny and antitrust probes targeting its Medicare Advantage and Optum businesses, Show more. |
| Attractive cash flow generationCFO LTM is 20 Bil, FCF LTM is 16 Bil | ||
| Megatrend and thematic driversMegatrends include Digital Health & Telemedicine, and Aging Population & Chronic Disease. Themes include Telehealth Platforms, Remote Patient Monitoring, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.0%, Dividend Yield is 3.2%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.0%, FCF Yield is 6.4% |
| Attractive cash flow generationCFO LTM is 20 Bil, FCF LTM is 16 Bil |
| Megatrend and thematic driversMegatrends include Digital Health & Telemedicine, and Aging Population & Chronic Disease. Themes include Telehealth Platforms, Remote Patient Monitoring, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -68%, 3Y Excs Rtn is -104% |
| Key risksUNH key risks include [1] intense regulatory scrutiny and antitrust probes targeting its Medicare Advantage and Optum businesses, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Disappointing 2026 Revenue Guidance.
UnitedHealth projected its 2026 consolidated revenues to be more than $439 billion, representing an approximate 2% decline from the $447.6 billion reported in 2025. This forecast of revenue contraction, the first in a decade, triggered a significant stock drop, including a 16.39% plummet in pre-market trading following the Q4 2025 earnings release on January 27, 2026.
2. Intensified Medicare Advantage Headwinds.
The company faces substantial challenges in its Medicare Advantage (MA) segment, a primary revenue driver. UnitedHealthcare expects to lose between 1.3 million and 1.4 million MA members in 2026 due to strategic repricing and heightened competition. Furthermore, the Centers for Medicare & Medicaid Services' proposed a minimal 0.09% increase in MA rates for 2027, which was significantly below expectations and will pressure profitability. The medical care ratio (MCR) for UnitedHealth also rose to 89.1% in 2025 from 85.5% in 2024, reflecting elevated utilization and higher service intensity.
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Stock Movement Drivers
Fundamental Drivers
The -15.2% change in UNH stock from 11/30/2025 to 3/20/2026 was primarily driven by a -33.4% change in the company's Net Income Margin (%).| (LTM values as of) | 11302025 | 3202026 | Change |
|---|---|---|---|
| Stock Price ($) | 325.04 | 275.59 | -15.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 435,159 | 447,567 | 2.9% |
| Net Income Margin (%) | 4.0% | 2.7% | -33.4% |
| P/E Multiple | 16.7 | 20.8 | 24.0% |
| Shares Outstanding (Mil) | 906 | 908 | -0.2% |
| Cumulative Contribution | -15.2% |
Market Drivers
11/30/2025 to 3/20/2026| Return | Correlation | |
|---|---|---|
| UNH | -15.2% | |
| Market (SPY) | -4.8% | 12.9% |
| Sector (XLV) | -7.8% | 38.8% |
Fundamental Drivers
The -9.2% change in UNH stock from 8/31/2025 to 3/20/2026 was primarily driven by a -46.5% change in the company's Net Income Margin (%).| (LTM values as of) | 8312025 | 3202026 | Change |
|---|---|---|---|
| Stock Price ($) | 303.51 | 275.59 | -9.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 422,818 | 447,567 | 5.9% |
| Net Income Margin (%) | 5.0% | 2.7% | -46.5% |
| P/E Multiple | 12.9 | 20.8 | 60.6% |
| Shares Outstanding (Mil) | 907 | 908 | -0.1% |
| Cumulative Contribution | -9.2% |
Market Drivers
8/31/2025 to 3/20/2026| Return | Correlation | |
|---|---|---|
| UNH | -9.2% | |
| Market (SPY) | 1.1% | 22.0% |
| Sector (XLV) | 6.2% | 39.8% |
Fundamental Drivers
The -40.1% change in UNH stock from 2/28/2025 to 3/20/2026 was primarily driven by a -29.2% change in the company's P/E Multiple.| (LTM values as of) | 2282025 | 3202026 | Change |
|---|---|---|---|
| Stock Price ($) | 459.97 | 275.59 | -40.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 400,278 | 447,567 | 11.8% |
| Net Income Margin (%) | 3.6% | 2.7% | -25.1% |
| P/E Multiple | 29.3 | 20.8 | -29.2% |
| Shares Outstanding (Mil) | 918 | 908 | 1.1% |
| Cumulative Contribution | -40.1% |
Market Drivers
2/28/2025 to 3/20/2026| Return | Correlation | |
|---|---|---|
| UNH | -40.1% | |
| Market (SPY) | 10.4% | 11.4% |
| Sector (XLV) | -1.1% | 39.3% |
Fundamental Drivers
The -38.4% change in UNH stock from 2/28/2023 to 3/20/2026 was primarily driven by a -56.6% change in the company's Net Income Margin (%).| (LTM values as of) | 2282023 | 3202026 | Change |
|---|---|---|---|
| Stock Price ($) | 447.08 | 275.59 | -38.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 324,162 | 447,567 | 38.1% |
| Net Income Margin (%) | 6.2% | 2.7% | -56.6% |
| P/E Multiple | 20.8 | 20.8 | 0.0% |
| Shares Outstanding (Mil) | 934 | 908 | 2.9% |
| Cumulative Contribution | -38.4% |
Market Drivers
2/28/2023 to 3/20/2026| Return | Correlation | |
|---|---|---|
| UNH | -38.4% | |
| Market (SPY) | 70.3% | 11.8% |
| Sector (XLV) | 19.6% | 42.4% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| UNH Return | 45% | 7% | 1% | -2% | -33% | -14% | -13% |
| Peers Return | 33% | 12% | -9% | -26% | 11% | -15% | -6% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -3% | 76% |
Monthly Win Rates [3] | |||||||
| UNH Win Rate | 58% | 42% | 42% | 50% | 50% | 33% | |
| Peers Win Rate | 52% | 60% | 42% | 45% | 58% | 27% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| UNH Max Drawdown | -8% | -9% | -15% | -16% | -52% | -19% | |
| Peers Max Drawdown | -6% | -12% | -23% | -29% | -21% | -17% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -3% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: CVS, CI, ELV, HUM, CNC. See UNH Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 3/20/2026 (YTD)
How Low Can It Go
| Event | UNH | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -19.3% | -25.4% |
| % Gain to Breakeven | 24.0% | 34.1% |
| Time to Breakeven | 370 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -36.2% | -33.9% |
| % Gain to Breakeven | 56.7% | 51.3% |
| Time to Breakeven | 70 days | 148 days |
| 2018 Correction | ||
| % Loss | -24.3% | -19.8% |
| % Gain to Breakeven | 32.0% | 24.7% |
| Time to Breakeven | 243 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -72.4% | -56.8% |
| % Gain to Breakeven | 261.9% | 131.3% |
| Time to Breakeven | 1,229 days | 1,480 days |
Compare to CVS, CI, ELV, HUM, CNC
In The Past
UnitedHealth's stock fell -19.3% during the 2022 Inflation Shock from a high on 10/31/2022. A -19.3% loss requires a 24.0% gain to breakeven.
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About UnitedHealth (UNH)
AI Analysis | Feedback
```htmlAnalogies for UnitedHealth (UNH):
- It's like the Cigna of health insurance combined with the CVS Caremark of prescription management.
- Think of it as the Accenture of healthcare technology and consulting, but also a massive health insurer.
AI Analysis | Feedback
- Health Benefit Plans: Comprehensive health, dental, and well-being benefit plans and services for various populations, including employers, individuals, seniors, and government program beneficiaries (Medicaid).
- Health Management & Care Delivery Services: Provides access to care provider networks, health management services, and direct care delivery systems for individuals, employers, and government entities.
- Healthcare Technology & Consulting: Offers software, information products, advisory consulting, and managed services outsourcing to various healthcare organizations and governments.
- Pharmacy Care Services: Provides comprehensive pharmacy benefit management including retail network contracting, home delivery, specialty pharmacy, and clinical programs for medication management.
AI Analysis | Feedback
UnitedHealth (UNH) serves a diverse range of customers, which can be categorized into the following major groups:
- Employers: This extensive category includes national employers, public sector employers, mid-sized employers, and small businesses. These entities purchase health benefit plans and services from UnitedHealth for their employees and members.
- Individuals: This group comprises general consumers seeking health coverage, individuals aged 50 and older (particularly for Medicare Advantage plans and services), and those eligible for government-sponsored programs such as Medicaid and the Children's Health Insurance Program (CHIP).
- Healthcare Organizations and Government Entities: This category includes various institutional clients such as hospital systems, physicians, other health plans, and life sciences companies, primarily for OptumInsight's software, information products, advisory consulting, and managed services. It also covers federal and state government entities, which engage UnitedHealth for services or through contracts for public health programs.
AI Analysis | Feedback
```html- McKesson Corporation (MCK)
- Cardinal Health (CAH)
- AmerisourceBergen Corporation (ABC)
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Stephen J. Hemsley, Chief Executive Officer
Stephen J. Hemsley was appointed Chief Executive Officer of UnitedHealth Group effective May 13, 2025. He previously served as the company's CEO from 2006 to 2017. He joined UnitedHealth Group in 1997 as Chief Operating Officer and became President in 1999. Mr. Hemsley also serves as the Chairman of the company's Board of Directors.
Wayne S. DeVeydt, Chief Financial Officer
Wayne S. DeVeydt was appointed Chief Financial Officer of UnitedHealth Group, effective September 2, 2025. Prior to joining UnitedHealth Group, he most recently served as a Managing Director and Operating Partner at Bain Capital, a private equity firm. From 2018 to 2020, he was Chairman and CEO of Surgery Partners, Inc. Mr. DeVeydt also served as the CFO of Anthem, Inc. (now Elevance) from 2007 to 2016. Earlier in his career, he was a Partner at PricewaterhouseCoopers LLP, focusing on the healthcare sector.
John F. Rex, Strategic Advisor to the CEO
John F. Rex transitioned to the role of Strategic Advisor to the CEO on September 2, 2025, after serving as UnitedHealth Group's Chief Financial Officer and Executive Vice President since 2016. He joined UnitedHealth Group in 2012 as the CFO of its Optum business. His prior experience includes serving as Chief Financial Officer and Executive Vice President for InGensa, Inc., as well as holding positions as a leading equity research analyst at firms such as JP Morgan Chase & Co., Robertson Stephens, Inc., and Bear Stearns Companies Inc. He also worked as a strategy and operational consultant and is a Certified Public Accountant.
Dr. Patrick Conway, Chief Executive Officer, Optum
Dr. Patrick Conway, M.D., became Chief Executive Officer of Optum effective April 29, 2025. He has an extensive background as a public and private healthcare leader and practicing pediatrician. Before this role, he held senior leadership positions at Optum Rx and Optum Health.
Heather Cianfrocco, Executive Vice President, Governance, Compliance and Information Security
Heather Cianfrocco was appointed UnitedHealth Group’s Executive Vice President of Governance, Compliance and Information Security, effective April 29, 2025. She brings deep knowledge of the company's business from her experience in senior leadership roles across UnitedHealthcare and Optum, coupled with a decade working as a lawyer.
AI Analysis | Feedback
The key risks to UnitedHealth (UNH) primarily revolve around regulatory challenges, rising medical costs impacting its Medicare Advantage segment, and the ongoing fallout from significant cyberattacks.
-
Regulatory Scrutiny and Government Intervention: UnitedHealth faces significant regulatory and legal risks due to ongoing government investigations and potential legislative changes. The Department of Justice (DOJ) has initiated criminal and civil investigations into Medicare Advantage billing practices, alongside antitrust probes into Optum's vertical integration, particularly concerning its Pharmacy Benefit Manager (PBM) business and the acquisition of Change Healthcare. Proposed legislation aimed at increasing transparency for PBMs could also lead to changes in business models and reduced profitability for Optum Rx. Additionally, evolving regulatory frameworks, including adjustments to Medicare Advantage and Medicaid reimbursement rates and risk adjustment models, continue to exert cost pressures and could compress profit margins.
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Rising Medical Costs and Medicare Advantage Margin Pressure: UnitedHealth is grappling with higher-than-expected healthcare utilization and increased medical costs, particularly within its Medicare Advantage segment and Optum Health. This trend has led to elevated medical care ratios (MCR) and pressure on profit margins, with Medicare Advantage margins expected to be significantly lower than historical targets. New risk adjustment models, such as the V28 revisions by the Centers for Medicare & Medicaid Services (CMS), are designed to tighten coding for patient conditions, which could "structurally impair" Optum Health and reduce payments.
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Cyberattack Fallout: The February 2024 ransomware attack on Change Healthcare, a subsidiary within UnitedHealth's Optum segment, poses a significant and ongoing risk. This cyberattack caused widespread disruption across the U.S. healthcare sector, affecting pharmacies, patient prescription access, and billing processes. The incident has resulted in substantial financial costs for UnitedHealth, including over $3 billion in 2024, and continues to present reputational damage and necessitate significant cybersecurity investments to mitigate future threats.
AI Analysis | Feedback
```htmlThere are two clear emerging threats to UnitedHealth:
- The aggressive expansion of Amazon Pharmacy (including services like PillPack and RxPass) into home delivery, specialty pharmacy, and potentially broader pharmacy benefit management (PBM) services, which directly threatens OptumRx's market share and business model.
- The rapid growth and consolidation of tech-enabled primary care and integrated care delivery networks by new entrants and competitors, such as Amazon's acquisition of One Medical and CVS's acquisition of Oak Street Health, which directly competes with OptumHealth's care delivery and provider network capabilities by offering alternative, often digitally enhanced, access to healthcare services.
AI Analysis | Feedback
UnitedHealth Group (UNH) operates across diversified health care segments, each addressing substantial markets primarily within the United States.
UnitedHealthcare Segment
This segment focuses on health benefit plans and services for various consumer groups.
- U.S. Health & Medical Insurance Market: The overall U.S. health and medical insurance market was valued at approximately $1.6 trillion in 2026 and is projected to reach $2.15 trillion by 2031, growing at a CAGR of 5.37%. Other estimates placed the market at $1.23 trillion in 2024, expected to grow to $1.77 trillion by 2030, with a CAGR of 6.98%. Another source valued the U.S. health insurance market at $613.0 billion in 2024, projected to increase to $1,161.7 billion by 2032 at an 8.5% CAGR.
- U.S. Group Health Insurance Market (Commercial): The U.S. group health insurance market, also known as employer-sponsored insurance, was estimated at $1.41 trillion in 2024 and is projected to grow at a CAGR of 2.2% from 2025 to 2030. UnitedHealth Group held a 16% market share in the national commercial health insurance market in 2024.
- U.S. Medicare Advantage Market: The U.S. Medicare Advantage market size was estimated at $445.97 billion in 2025 and is projected to expand to $1,060.04 billion by 2034, growing at a CAGR of 10.1%. Enrollment in Medicare Advantage reached 34.1 million beneficiaries in 2025, accounting for 54% of all eligible Medicare individuals in the U.S. By February 2026, 51% of the Medicare population was enrolled in Medicare Advantage plans, totaling 35.4 million beneficiaries.
- U.S. Medicaid Market: In January 2025, 71.4 million people were enrolled in Medicaid in the U.S. Total Medicaid spending was $884.4 billion in fiscal year 2023. In fiscal year 2024, total Medicaid spending was $919 billion. UnitedHealth Group held a 9% share of the Medicaid Managed Care Organization (MCO) market as of September 2024.
- U.S. Hospital Services Market: The U.S. hospital services market was valued at $2.64 trillion in 2025 and is predicted to increase to approximately $4.16 trillion by 2035, expanding at a CAGR of 4.65% from 2025 to 2034.
OptumRx Segment
This segment provides pharmacy care services and programs.
- U.S. Pharmacy Benefit Management (PBM) Market: The U.S. pharmacy benefit management market size was calculated at $459.65 billion in 2025 and is expected to reach approximately $1,041.11 billion by 2034, growing at a CAGR of 9.7% from 2025 to 2034. Another report valued the market at $626.47 billion in the U.S. in 2026. In 2024, OptumRx, along with two other major PBMs, processed roughly 80% of all U.S. pharmacy claims.
OptumHealth & OptumInsight Segments
These segments offer health management, care delivery, software, information products, and consulting.
- U.S. Healthcare IT Market: The U.S. healthcare IT market size was valued at $160.52 billion in 2024 and is projected to reach approximately $566.48 billion by 2034, expanding at a CAGR of 13.44% from 2025 to 2034. Other estimates place the U.S. healthcare IT market at $182.09 billion in 2025, reaching $396.82 billion by 2030 at a CAGR of 14.0%. The total IT spend by healthcare organizations in the U.S. is projected to reach $176.6 billion, representing 63% of the global healthcare IT market size in 2025.
- U.S. Healthcare Consulting Services Market: The U.S. healthcare consulting services market was valued at $10.1 billion in 2024 and is anticipated to grow at a CAGR of 7.6% between 2025 and 2034. Another source projected the healthcare consulting services market size to reach $52.0 billion by 2030 from $32.2 billion in 2025, at a CAGR of 10.1%. North America held the largest share of 40.3% of the global healthcare consulting services market in 2024.
- U.S. Healthcare Business Process Outsourcing (BPO) Market: The U.S. healthcare BPO market is valued at $165.05 billion in 2026 and is projected to reach $245.46 billion by 2031, growing at an 8.26% CAGR.
AI Analysis | Feedback
UnitedHealth Group (UNH) is focusing on several key areas to drive future revenue growth over the next two to three years, despite facing immediate headwinds such as proposed flat Medicare Advantage reimbursement rates for 2027 and rising medical costs. The company is implementing strategic initiatives to stabilize its core businesses and expand its health services segments.
Here are 3-5 expected drivers of future revenue growth:
- Expansion of Optum Segment, particularly Optum Rx and Optum Health: The Optum segment is consistently identified as a primary growth engine. Optum Rx has secured over 800 new client relationships for the 2026 and 2027 selling seasons, which is anticipated to boost operating earnings and margin expansion, supported by AI automation and operational efficiencies. Concurrently, Optum Health projects approximately 9% operating earnings growth in 2026, driven by a renewed focus on integrated value-based care within key markets and improved execution.
- Strategic Repricing and Operational Discipline within UnitedHealthcare: UnitedHealthcare is undergoing a "re-baselining" of its operations and is aligning its pricing discipline to account for higher medical trends and the impact of healthcare policy changes. This strategic repricing across the enterprise and efforts to improve the medical care ratio are aimed at stabilizing and eventually growing revenue in its health benefits business, even amidst external challenges.
- Growth of Value-Based Care Models: A strategic shift towards integrated value-based care arrangements within Optum Health is expected to be a significant driver. These models aim to manage the total cost of care more effectively, leading to improved outcomes and supporting the retention of cash, which can attract more clients and expand service offerings over time.
- Leveraging AI and Technology for Efficiency and Service Enhancement: UnitedHealth Group is investing in AI automation to drive operating efficiencies, particularly within Optum Rx, which is expected to support margin expansion. While not a direct revenue driver, these technological advancements can enhance competitiveness, improve cost management, and free up resources for further growth initiatives and improved service delivery, ultimately supporting revenue expansion.
AI Analysis | Feedback
Share Repurchases
- UnitedHealth Group's repurchase of common stock averaged $6.909 billion annually from fiscal years ending December 2021 to 2025.
- Annual share repurchases were $5 billion in 2021, $7 billion in 2022, $8 billion in 2023, $9 billion in 2024, and $5.545 billion in 2025.
- In 2024, the company returned over $16 billion to shareholders through dividends and share repurchases.
Share Issuance
- UnitedHealth Group's shares outstanding have generally declined over the past few years, with 0.911 billion shares outstanding in 2025 (a 1.94% decline from 2024), 0.929 billion in 2024 (a 0.96% decline from 2023), and 0.938 billion in 2023 (a 1.26% decline from 2022).
Outbound Investments
- UnitedHealth Group made 6 investments across sectors including Healthcare IT, Clinical Labs IT, and Healthcare Booking Platforms.
- Notable recent investments include a Seed round in Carpl (February 2024), a Seed round in Mundial Media (September 2023), and a Series A in Morgan's Wonderland (October 2022).
- The company merged Change Healthcare in 2022, enhancing Optum's analytics and pharmacy capabilities.
- Optum Health integrated large groups such as LHC Group in 2023 and aims to expand to thousands more clinical sites by 2025–2026 through acquisitions and affiliations.
Capital Expenditures
- UnitedHealth Group's capital expenditures for fiscal years ending December 2021 to 2025 averaged $3.153 billion.
- Capital expenditures consistently increased, rising from $2.454 billion in 2021 to $3.622 billion in 2025.
- The company plans to invest nearly $1.5 billion in 2026 and a similar amount in 2027 to support enterprise-wide AI initiatives, focusing on accelerating AI-first product development at OptumInsight and expanding automation across OptumRx and UnitedHealthcare.
- Forecasted capital expenditures are $3.9 billion for 2026, $4.042 billion for 2027, and $4.173 billion for 2028.
Latest Trefis Analyses
Trade Ideas
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| 02282026 | QDEL | QuidelOrtho | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 02272026 | CHE | Chemed | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.0% | 0.0% | 0.0% |
| 02272026 | LLY | Eli Lilly | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 0.0% | 0.0% | 0.0% |
| 02202026 | HAE | Haemonetics | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.5% | 3.5% | 0.0% |
| 02132026 | IQV | IQVIA | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 7.1% | 7.1% | -3.0% |
| 05312025 | UNH | UnitedHealth | Dip Buy | DB | FCF Yield | Low D/EDip Buy with High Free Cash Flow YieldBuying dips for companies with significant free cash flow yield (FCF / Market Cap) and reasonable debt / market cap | 10.7% | -0.9% | -20.7% |
Research & Analysis
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Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 216.37 |
| Mkt Cap | 66.9 |
| Rev LTM | 236,856 |
| Op Inc LTM | 10,385 |
| FCF LTM | 6,064 |
| FCF 3Y Avg | 6,503 |
| CFO LTM | 7,344 |
| CFO 3Y Avg | 8,323 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 12.1% |
| Rev Chg 3Y Avg | 11.0% |
| Rev Chg Q | 10.7% |
| QoQ Delta Rev Chg LTM | 2.5% |
| Op Mgn LTM | 2.6% |
| Op Mgn 3Y Avg | 3.1% |
| QoQ Delta Op Mgn LTM | -0.7% |
| CFO/Rev LTM | 2.6% |
| CFO/Rev 3Y Avg | 3.2% |
| FCF/Rev LTM | 2.1% |
| FCF/Rev 3Y Avg | 2.5% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 66.9 |
| P/S | 0.2 |
| P/EBIT | 8.6 |
| P/E | 14.4 |
| P/CFO | 10.6 |
| Total Yield | 7.9% |
| Dividend Yield | 2.3% |
| FCF Yield 3Y Avg | 7.5% |
| D/E | 0.6 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -9.1% |
| 3M Rtn | -12.9% |
| 6M Rtn | -7.2% |
| 12M Rtn | -33.4% |
| 3Y Rtn | -37.0% |
| 1M Excs Rtn | -4.0% |
| 3M Excs Rtn | -10.2% |
| 6M Excs Rtn | -6.2% |
| 12M Excs Rtn | -47.8% |
| 3Y Excs Rtn | -102.3% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| UnitedHealthcare | 298,208 | 281,360 | 249,741 | 222,899 | 200,875 |
| Optum Rx | 133,231 | 116,087 | 99,773 | 35,535 | 35,078 |
| Optum Health | 105,358 | 95,319 | 71,174 | 24,831 | 17,327 |
| Optum Insight | 18,757 | 18,932 | 14,581 | 4,332 | 3,861 |
| Optum Eliminations | -4,389 | -3,703 | -2,760 | ||
| Corporate and Eliminations | -150,887 | -136,373 | -108,347 | ||
| Total | 400,278 | 371,622 | 324,162 | 287,597 | 257,141 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| UnitedHealthcare | 15,584 | 16,415 | 14,379 | 11,975 | 12,359 |
| Optum Health | 7,770 | 6,560 | 6,032 | 4,462 | 3,434 |
| Optum Rx | 5,836 | 5,115 | 4,436 | 4,135 | 3,887 |
| Optum Insight | 3,097 | 4,268 | 3,588 | 3,398 | 2,725 |
| Corporate and Eliminations | 0 | 0 | 0 | ||
| Optum Eliminations | 0 | 0 | 0 | ||
| Total | 32,287 | 32,358 | 28,435 | 23,970 | 22,405 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| UnitedHealthcare | 119,009 | 110,943 | 107,094 | 102,967 | 98,229 |
| Optum Health | 96,472 | 89,432 | 68,950 | 60,474 | 52,073 |
| Optum Rx | 59,086 | 51,266 | 47,476 | 40,181 | 39,280 |
| Optum Insight | 34,452 | 34,173 | 31,090 | 16,868 | 15,425 |
| Optum Eliminations | 0 | 0 | 0 | ||
| Corporate and Eliminations | -10,741 | -12,094 | -8,905 | -8,284 | -7,718 |
| Total | 298,278 | 273,720 | 245,705 | 212,206 | 197,289 |
Price Behavior
| Market Price | $275.59 | |
| Market Cap ($ Bil) | 249.7 | |
| First Trading Date | 03/26/1990 | |
| Distance from 52W High | -52.7% | |
| 50 Days | 200 Days | |
| DMA Price | $296.86 | $309.89 |
| DMA Trend | down | down |
| Distance from DMA | -7.2% | -11.1% |
| 3M | 1YR | |
| Volatility | 48.8% | 51.0% |
| Downside Capture | 56.26 | 45.67 |
| Upside Capture | -33.17 | -23.25 |
| Correlation (SPY) | 11.1% | 11.1% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.79 | 0.23 | 0.32 | 0.67 | 0.28 | 0.27 |
| Up Beta | 1.45 | 2.25 | 1.62 | 0.83 | 0.52 | 0.48 |
| Down Beta | 0.58 | -0.07 | -0.16 | 0.62 | 0.22 | 0.15 |
| Up Capture | 70% | -73% | -22% | 44% | -11% | 1% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 9 | 21 | 28 | 61 | 126 | 384 |
| Down Capture | 62% | 24% | 50% | 76% | 37% | 52% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 12 | 20 | 33 | 63 | 125 | 368 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with UNH | |
|---|---|---|---|---|
| UNH | -43.8% | 50.9% | -0.94 | - |
| Sector ETF (XLV) | 0.2% | 17.6% | -0.14 | 39.7% |
| Equity (SPY) | 15.8% | 18.9% | 0.64 | 11.4% |
| Gold (GLD) | 48.2% | 27.0% | 1.45 | 6.2% |
| Commodities (DBC) | 17.8% | 17.4% | 0.83 | -4.4% |
| Real Estate (VNQ) | 1.0% | 16.4% | -0.11 | 10.4% |
| Bitcoin (BTCUSD) | -19.0% | 44.2% | -0.35 | 6.6% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with UNH | |
|---|---|---|---|---|
| UNH | -3.2% | 31.2% | -0.05 | - |
| Sector ETF (XLV) | 6.3% | 14.5% | 0.26 | 49.8% |
| Equity (SPY) | 11.8% | 17.0% | 0.54 | 23.4% |
| Gold (GLD) | 20.7% | 17.5% | 0.97 | 4.6% |
| Commodities (DBC) | 10.9% | 19.0% | 0.46 | 2.0% |
| Real Estate (VNQ) | 2.8% | 18.8% | 0.06 | 19.5% |
| Bitcoin (BTCUSD) | 4.7% | 56.7% | 0.30 | 8.8% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with UNH | |
|---|---|---|---|---|
| UNH | 10.0% | 29.8% | 0.38 | - |
| Sector ETF (XLV) | 9.6% | 16.5% | 0.47 | 63.0% |
| Equity (SPY) | 14.2% | 17.9% | 0.68 | 46.0% |
| Gold (GLD) | 13.3% | 15.7% | 0.70 | 3.2% |
| Commodities (DBC) | 8.3% | 17.6% | 0.39 | 12.8% |
| Real Estate (VNQ) | 5.0% | 20.7% | 0.21 | 38.2% |
| Bitcoin (BTCUSD) | 66.9% | 66.8% | 1.06 | 9.7% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 1/27/2026 | -19.6% | -18.8% | -19.2% |
| 10/28/2025 | 0.5% | -8.8% | -10.8% |
| 7/29/2025 | -7.5% | -14.6% | 6.5% |
| 4/17/2025 | -22.4% | -27.5% | -50.1% |
| 1/16/2025 | -6.0% | -2.5% | -3.7% |
| 10/15/2024 | -8.1% | -5.6% | 1.5% |
| 7/16/2024 | 6.5% | 8.4% | 11.4% |
| 4/16/2024 | 5.2% | 10.2% | 15.3% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 12 | 10 | 14 |
| # Negative | 12 | 14 | 10 |
| Median Positive | 4.0% | 5.1% | 6.3% |
| Median Negative | -3.1% | -4.1% | -6.7% |
| Max Positive | 7.2% | 12.6% | 15.3% |
| Max Negative | -22.4% | -27.5% | -50.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 03/02/2026 | 10-K |
| 09/30/2025 | 10/28/2025 | 10-Q |
| 06/30/2025 | 08/11/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/27/2025 | 10-K |
| 09/30/2024 | 11/04/2024 | 10-Q |
| 06/30/2024 | 08/09/2024 | 10-Q |
| 03/31/2024 | 05/09/2024 | 10-Q |
| 12/31/2023 | 02/28/2024 | 10-K |
| 09/30/2023 | 11/06/2023 | 10-Q |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/03/2023 | 10-Q |
| 12/31/2022 | 02/24/2023 | 10-K |
| 09/30/2022 | 11/02/2022 | 10-Q |
| 06/30/2022 | 08/03/2022 | 10-Q |
| 03/31/2022 | 05/04/2022 | 10-Q |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Baker, Charles D | Trust | Sell | 9152025 | 356.05 | 27 | Form | |||
| 2 | Conway, Patrick Hugh | Chief Executive Officer, Optum | Direct | Sell | 6122025 | 305.00 | 589 | 179,645 | 3,171,528 | Form |
| 3 | Rex, John F | President & CFO | Direct | Buy | 5162025 | 291.12 | 17,175 | 4,999,919 | 59,328,308 | Form |
| 4 | Hemsley, Stephen J | CEO, UHG | Direct | Buy | 5162025 | 288.57 | 86,700 | 25,019,019 | 196,081,278 | Form |
| 5 | Flynn, Timothy Patrick | Trust | Buy | 5162025 | 320.80 | 1,533 | 491,786 | 1,935,386 | Form |
UNH Trade Sentinel
MARKET WEIGHT (Score 5-6)
CONVICTION RATIONALE
The probability-adjusted skew of 1.23x is not compelling enough to warrant a 'Buy' rating. The potential upside is counterbalanced by significant execution risk in the turnaround plan and severe structural headwinds from regulatory pricing pressure. The current valuation fairly reflects a 'show-me' story, making UNH a candidate for the watchlist pending tangible evidence of margin stabilization.
STOCK ARCHETYPE
Turnaround / Deep ValueThe company has guided for a revenue decline for the first time in decades and is deliberately shrinking its core Medicare Advantage business to restore profitability. The investment thesis for the next 12-18 months hinges entirely on successful strategic execution of this margin recovery plan, which aligns perfectly with the Turnaround archetype's focus.
INVESTMENT THESIS
The 'Long' thesis is based on the successful execution of the company's 'good shrink' strategy. By exiting unprofitable insurance markets in 2026, UNH can restore its operating margin to its historical target of >5.5%. This, combined with the continued stable growth of the high-margin Optum platform, will lead to higher quality earnings in 2027, prompting a re-rating of the stock once the market gains confidence in the turnaround.
- Management guidance for 2026 operating margin to improve to >5.5% from the depressed 2025 level of 4.2%.
- The Optum segment, which has a higher margin profile (~7-8%), continues to grow at a double-digit pace (+13% in Q4 2025), providing a stable earnings buffer.
- The company's scale and integrated Optum model provide the infrastructure necessary to manage costs effectively once repricing actions are complete.
PRIMARY RISK
The primary risk is that the government-mandated reimbursement rates for Medicare Advantage (MA) are structurally insufficient to cover the current reality of high medical cost inflation. The proposed 2027 MA rate increase of only 0.09% against medical cost trends of 7-10% could lead to a permanent impairment of profitability in UNH's largest business segment, forcing it to either accept lower margins or continue to cede market share beyond the planned 2026 reset.
- The adjusted Medical Care Ratio (MCR) surged 340 basis points to 88.9% in 2025, indicating costs are severely outpacing premiums.
- The 2027 preliminary Medicare Advantage reimbursement rate increase is only 0.09%, which management has called 'disappointing'.
- The company is forced to forecast a contraction of 1.3 to 1.4 million Medicare Advantage members in 2026 to mitigate losses.
| KPI | Threshold | Rationale |
|---|---|---|
| Medical Care Ratio (MCR) | Tracking at or below the 88.8% full-year 2026 guidance. | This is the single most important leading indicator of the margin recovery thesis. Failure to control the MCR means the entire turnaround plan fails. |
| 2027 Medicare Advantage Final Rate Notice (due by April 2026) | A material improvement from the +0.09% preliminary figure. | This external, regulatory decision will determine the long-term profitability of UNH's largest business segment and dictate whether the 2026 'shrink' is a one-time reset or the beginning of a prolonged decline. |
| DOJ Antitrust Investigation Status | No formal lawsuit filed seeking structural remedies (e.g., break up of Optum). | A significant legal overhang. An escalation from investigation to a formal lawsuit would challenge the entire integrated business model and cause a severe de-rating of the stock. |
Margin Recovery vs. Structural Erosion
BULL VIEW
Exiting unprofitable MA markets is a necessary reset. The Medical Care Ratio (MCR) will stabilize below 88.8%, and Optum's growth will drive higher-quality earnings in 2027.
CORE TENSION
Can UNH's 'good shrink' strategy and Optum's growth offset structurally insufficient Medicare Advantage (MA) reimbursement rates to restore historical margins?
PREVAILING SENTIMENT
The company is forecasting a contraction of 1.3 to 1.4 million Medicare Advantage members in 2026 to mitigate losses.
BEAR VIEW
Government rates (e.g., +0.09% for 2027) cannot cover medical cost inflation (7-10%). This forces a permanent choice between lower margins or continued, significant market share loss.
| Timeline | Event & Metric To Watch |
|---|---|
Mid-April 2026 | UNH Q1 2026 Earnings Release Watch: Medical Care Ratio (MCR) tracking at/below 88.8% guidance. Any deviation from the planned 1.3-1.4M MA member reduction. |
By April 6, 2026 | 2027 Medicare Advantage Final Rate Notice Watch: Final 2027 MA rate vs. the +0.09% preliminary figure. A material upward revision is needed to signal long-term sustainability. |
Anytime | DOJ Antitrust Investigation Update Watch: News of a formal lawsuit being filed by the DOJ seeking structural remedies (e.g., breaking up Optum). |
| Date | Event | Stock Impact |
|---|---|---|
Sep 4, 2025 | Peer Strategy Announcement Details: Peer Elevance Health announced it was also cutting some Medicare Advantage plans, highlighting the broad, structural pressures facing the entire industry. | Muted (0.8%) $303.90 -> $306.37 |
Oct 28, 2025 | Q3 2025 Earnings Details: Company reported third-quarter results and raised its full-year 2025 earnings outlook at the time, prior to the major 2026 guidance cut. | Fell notably by -3.4% $365.38 -> $352.88 |
Nov 10, 2025 | UBS Global Healthcare Conference Details: Senior leaders participated in an interview format discussion, providing updates on strategy and market conditions ahead of year-end. | Muted (-0.8%) $322.04 -> $319.43 |
Dec 4, 2025 | Investor Conference 2025 Details: Company provided its initial outlook for 2025. This event occurred in 2024 for the 2025 outlook, but for the 2026 outlook, it would be Dec 2025. The price reaction reflects market digestion of the strategy. | Slight -1.8% pullback $337.44 -> $331.26 |
Jan 26, 2026 | CMS 2027 Advance Notice Details: CMS proposed a net payment increase for Medicare Advantage of only 0.09%, far below inflation, sparking a sector-wide selloff and criticism from UNH management. | Slight -1.3% pullback $356.26 -> $351.64 |
Jan 27, 2026 | Q4 2025 Earnings & Guidance Details: Company guided for a 2026 revenue decline and a loss of up to 2.8 million total members, including 1.3-1.4M in Medicare Advantage. Stock crashed on the news. | Plummeted -19.6% $351.64 -> $282.70 |
Position Sizing
1% - 3%
CONSERVATIVE
Stock is in an Explosive Volatility regime (4.0x S&P). The Bearish sentiment, contested moat, and fundamental break in the growth story warrant a Conservative 'watchlist' position despite the historically cheap valuation.
Diversification Alternatives
AVAH
SECTORUnlike UNH, which faces systemic pricing pressure, AVAH operates in the medical technology space, potentially offering growth without the same regulatory reimbursement risk.
ATRA
SECTORAs a biopharmaceutical company, ATRA's success is tied to clinical trial outcomes and drug approvals, decoupling it from the medical cost trend issues plaguing UNH.
Trading at a trough P/E multiple of ~16x forward earnings, the market is pricing UnitedHealth as a legacy insurer facing margin pressure, overlooking the shift towards a high-margin, data-driven healthcare services model powered by its Optum segment.
Filter all news through the lens of a strategic shift from membership volume to margin quality, and the expansion of the high-margin Optum services ecosystem.
Evidence of Optum segment margin expansion above 8-10% for Health and 18-22% for Insight; stabilization or improvement in Medical Care Ratio (MCR); announcements of AI-driven cost savings exceeding the $1B target for 2026; strategic acquisitions in value-based care or health tech.
Sustained Medicare Advantage membership losses beyond the projected 1.3-1.4 million in 2026; failure to achieve guided 2026 operating margin improvement; further negative regulatory changes to Medicare Advantage reimbursement rates; significant DOJ antitrust action against the vertical integration model.
Quarterly membership fluctuations (as the focus is now on margin); minor competitor plan wins/losses in specific geographies; broad political commentary on healthcare reform without specific regulatory action.
Repricing Catalyst
The key re-rating catalyst is the successful execution of the 2026 strategy focused on margin recovery over membership growth. This involves repricing insurance plans, exiting unprofitable Medicare Advantage markets (~1 million members), and realizing nearly $1 billion in AI-driven operational cost savings, which is expected to drive adjusted EPS growth of at least 8.6% despite a slight revenue decline.
UnitedHealthcare (Insurance Plans)
$344.9B TTM (77% of Total) · 2.7% MarginWhat It Is
Employer & Individual health plans; Medicare Advantage; Medicare Supplement (Medigap); Medicaid managed care plans.
Who Pays & How
Employers, individuals, and government agencies (CMS for Medicare, states for Medicaid) pay premiums for access to a negotiated network of healthcare providers and to shield members from the full cost of medical services. Lock-in is driven by the complexity and high switching costs of changing insurance providers, especially for large employers.
Competition
Optum (Health Services & Technology)
$270.6B TTM (23% of Total) · 8.0% MarginWhat It Is
Optum Health (physician clinics, surgery centers), Optum Insight (data analytics, revenue cycle management), Optum Rx (pharmacy benefit manager - PBM).
Who Pays & How
Health insurers (including UnitedHealthcare), hospital systems, and life sciences companies pay for services to reduce costs and improve outcomes. Optum Rx is paid by insurers and employers to manage prescription drug costs. Patients pay for care at Optum Health clinics.
Competition
External Quote Links
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