UnitedHealth (UNH) AI Stock Analysis

• Market Cap: $548.34B
• Dividend Yield: 1.85%
• Average Volume (3M): 5.38M
• Price to Earnings (P/E): 38.7
• Beta (1Y): 0.10
• Revenue Growth: 8.68%
• EPS Growth: N/A
• Country: US
• Employees: 400,000
• Sector: Healthcare
• Sector Strength: 66
• Industry: Medical - Healthcare Plans
• EPS (TTM): 6.81
• Shares Outstanding: 914,712,340
• 10 Day Avg. Volume: 7,352,911
• 30 Day Avg. Volume: 5,380,530
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.18
• Price to Cash Flow (P/CF): 49.90
• P/FCF Ratio: 37.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $600.60
• Price Target Upside: 32.26% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 23

UnitedHealth's overall score reflects a solid financial position with strong revenue growth and effective cash management. However, declining profitability metrics and bearish technical indicators temper the outlook. The earnings call highlighted both growth opportunities and challenges, affecting sentiment. Valuation remains balanced, offering a moderate dividend yield. Overall, the company is well-positioned but faces near-term challenges.

Positive Factors

Earnings Growth

Analyst reiterates Buy recommendation as the company is expected to reprice in 2026 and grow earnings as OptumHealth improves.

Legal Outlook

The Special Master's report indicates that the burden of proof is on the DOJ to prove improper coding, undermining the government's case.

Stock Performance

UNH shares have increased approximately 16% year-to-date, outperforming the S&P 500.

Negative Factors

Financial Performance

OptumHealth earnings guide was cut by $3bn with higher Medicare Advantage trend resulting in health plan earnings cut by $1.5bn.

Medicare Advantage Costs

Management's commentary around lowered FY25G EPS was the real takeaway, pointing to MA cost trends far above the planned 2025 increase.

Medicare Funding Impact

The ongoing Medicare funding reduction is having a greater-than-expected impact on current and new complex patients in Optum Health.

UnitedHealth Business Overview & Revenue Model

Company Description

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. It operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage and well-being services to individuals age 50 and older addressing their needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues for older individuals; Medicaid plans, children's health insurance and health care programs; health and dental benefits; and hospital and clinical services. The OptumHealth segment provides access to networks of care provider specialists, health management services, care delivery, consumer engagement, and financial services. This segment serves individuals directly through care delivery systems, employers, payers, and government entities. The OptumInsight segment offers software and information products, advisory consulting arrangements, and managed services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The OptumRx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and compounding pharmacy, and purchasing and clinical capabilities, as well as develops programs in the areas of step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated was incorporated in 1977 and is based in Minnetonka, Minnesota.

How the Company Makes Money

UnitedHealth Group makes money primarily through its two segments: UnitedHealthcare and Optum. UnitedHealthcare generates revenue by providing health insurance products and services, including commercial health plans for individuals and employers, Medicare and Medicaid plans, and global health services. This segment earns money through premiums, fees, and other revenues from its health plans. Optum contributes to UnitedHealth Group's revenue by offering a range of healthcare services. OptumHealth provides care delivery and management services, OptumInsight offers data analytics and consulting services, while OptumRx provides pharmacy care services. Revenue from Optum is derived from service fees, consulting fees, and pharmacy service revenues. The company also benefits from strategic partnerships and acquisitions that enhance its service offerings and expand its market reach.

UnitedHealth Financial Statement Overview

Summary

UnitedHealth exhibits strong revenue growth and solid cash flow management, but faces challenges with declining net profit margins and return on equity. The balance sheet remains robust with moderate leverage, providing a stable foundation for future growth. Focus should be on enhancing profitability and maximizing shareholder returns.

Income Statement

UnitedHealth has demonstrated strong revenue growth with a consistent increase in total revenue over the years, reaching $400.3 billion in 2024 from $367.5 billion in 2023, resulting in a revenue growth rate of 8.9%. The gross profit margin slightly improved from 23.6% in 2023 to 22.3% in 2024, while EBIT margin remained stable at approximately 8.1%. The net profit margin decreased from 6.1% in 2023 to 3.6% in 2024, which indicates a potential area of concern. Overall, the company shows strong revenue growth trends but with a slight decrease in profitability.

Balance Sheet

UnitedHealth's balance sheet is robust with a debt-to-equity ratio of 0.74 in 2024, indicating moderate leverage. The equity ratio is 32.9%, showing a healthy balance of equity to total assets. Return on equity, however, decreased from 25.2% in 2023 to 14.7% in 2024, suggesting reduced profitability on shareholders' equity. Despite solid equity and asset management, the decline in ROE may indicate potential challenges in maximizing shareholder value.

Cash Flow

The company has maintained a positive free cash flow, although it decreased from $25.7 billion in 2023 to $20.7 billion in 2024, reflecting a free cash flow growth rate of -19.5%. The operating cash flow to net income ratio improved to 1.68 in 2024, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.44, demonstrating effective cash flow management. Despite a decline in free cash flow growth, the overall cash flow position remains solid.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
400.28B	367.53B	322.13B	285.27B	255.64B
	Gross Profit
89.40B	86.87B	77.59B	67.33B	65.50B
	EBIT
32.29B	32.36B	28.43B	23.97B	22.41B
	EBITDA
9.77B	32.52B	31.84B	27.07B	25.30B
	Net Income Common Stockholders
14.40B	22.38B	20.12B	17.29B	15.40B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
29.11B	29.63B	27.91B	23.91B	19.78B
	Total Assets
298.28B	273.72B	245.71B	212.21B	197.29B
	Total Debt
76.90B	62.54B	57.62B	46.00B	43.47B
	Net Debt
51.59B	37.11B	34.26B	24.63B	26.55B
	Total Liabilities
195.69B	174.80B	159.36B	135.73B	126.75B
	Stockholders Equity
92.66B	88.76B	77.77B	71.76B	65.49B
Cash Flow		Free Cash Flow
20.70B	25.68B	23.40B	19.89B	20.12B
	Operating Cash Flow
24.20B	29.07B	26.21B	22.34B	22.17B
	Investing Cash Flow
-20.53B	-15.57B	-28.48B	-10.37B	-12.53B
	Financing Cash Flow
-3.51B	-11.53B	4.23B	-7.46B	-3.59B

UnitedHealth Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 454.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNH, the sentiment is Negative. The current price of 454.11 is below the 20-day moving average (MA) of 539.61, below the 50-day MA of 512.15, and below the 200-day MA of 545.82, indicating a bearish trend. The MACD of 12.39 indicates Positive momentum. The RSI at 31.91 is Neutral, neither overbought nor oversold. The STOCH value of 53.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UNH.

UnitedHealth Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVS	76 Outperform	$87.75B	19.01	6.07%	3.95%	4.02%	-43.51%
ELV	74 Outperform	$99.57B	17.13	14.83%	1.55%	3.19%	1.65%
CI	73 Outperform	$89.52B	27.23	7.87%	1.73%	25.21%	-29.37%
CNC	72 Outperform	$31.68B	10.22	12.65%	―	5.89%	27.09%
HUM	69 Neutral	$35.61B	29.55	7.40%	1.34%	10.70%	-49.85%
UNH	69 Neutral	$548.34B	38.66	15.88%	1.85%	8.68%	―
Sector *	51 Neutral	$5.19B	3.13	-40.94%	2.95%	17.94%	2.00%

UnitedHealth Corporate Events

UnitedHealth Projects Strong Financial Outlook for 2025

UnitedHealth Group has released its financial outlook for 2025, projecting revenues between $450 billion and $455 billion, with net earnings per share ranging from $28.15 to $28.65. The company anticipates cash flows from operations to be around $32 billion to $33 billion. These projections are part of its strategic focus on improving health care delivery and efficiency, highlighted ahead of its Investor Conference.