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UnitedHealth (UNH)
NYSE:UNH
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UnitedHealth
(NYSE:UNH)
66Neutral
Positive Factors
Financial Performance
Even in a very bearish case, earnings power is expected to be greater than $20 with EPS growth of approximately 12%.
Stock Valuation
UnitedHealth Group's stock is trading significantly below its 10-year historical average, presenting a potential opportunity due to its competitive advantages in a scaled, diversified model.
Negative Factors
Business Uncertainty
There is significant uncertainty about UNH's earnings power and growth potential, with visibility remaining low at least through the second quarter.
Leadership Changes
The announcement of Andrew Witty stepping down as CEO and the appointment of Steve Hemsley as the new CEO led to the suspension of UNH's 2025 guidance.
Legal Investigations
The Justice Department is investigating UNH for possible criminal fraud related to its Medicare Advantage business.
UnitedHealth (UNH) vs. S&P 500 (SPY)
Market Cap
$264.80B
Dividend Yield2.88%
Average Volume (3M)17.90M
Price to Earnings (P/E)12.2
Beta (1Y)-0.15
Revenue Growth8.68%
EPS Growth45.24%
CountryUS
Employees400,000
SectorHealthcare
Sector Strength41
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)7.20
Shares Outstanding907,140,440
10 Day Avg. Volume34,359,269
30 Day Avg. Volume17,898,692
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio14.64
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$404.04Price Target Upside38.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
UnitedHealth Business Overview & Revenue Model
Company DescriptionUnitedHealth Group Incorporated (UNH) is a diversified healthcare and well-being company based in the United States. It operates primarily through two business platforms: UnitedHealthcare, which offers health benefits, and Optum, which provides healthcare services. UnitedHealthcare is one of the largest providers of health insurance in the US, serving individuals, employers, and government entities. Optum delivers care through networks and technology-enabled services, focusing on pharmacy care services, healthcare delivery, and health technology.
How the Company Makes MoneyUnitedHealth 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 Key Performance Indicators (KPIs)
Any
People Served
Measures the number of individuals covered or served, reflecting market reach and potential for premium revenue growth.
Measures the number of individuals covered or served, reflecting market reach and potential for premium revenue growth.
Data provided by:
Main Street Data
Main Street DataUnitedHealth Financial Statement Overview
Summary
UnitedHealth exhibits strong financial health with substantial revenue growth and robust cash flow management. However, declining net profit margins and return on equity indicate potential areas for improvement. Despite these issues, the balance sheet is stable with moderate leverage, supporting future growth.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.85
Very Positive
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.80
Positive
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.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 407.42B | 400.28B | 367.53B | 322.13B | 285.27B | 255.64B | Gross Profit |
| 87.53B | 89.40B | 86.87B | 77.59B | 67.33B | 65.50B | EBIT |
| 33.48B | 32.29B | 32.36B | 28.43B | 23.97B | 22.41B | EBITDA |
| 31.08B | 9.77B | 32.52B | 31.84B | 27.07B | 25.30B | Net Income Common Stockholders |
| 22.11B | 14.40B | 22.38B | 20.12B | 17.29B | 15.40B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 34.29B | 29.11B | 29.63B | 27.91B | 23.91B | 19.78B | Total Assets |
| 309.79B | 298.28B | 273.72B | 245.71B | 212.21B | 197.29B | Total Debt |
| 9.99B | 76.90B | 62.54B | 57.62B | 46.00B | 43.47B | Net Debt |
| -24.30B | 51.59B | 37.11B | 34.26B | 24.63B | 26.55B | Total Liabilities |
| 0.00 | 195.69B | 174.80B | 159.36B | 135.73B | 126.75B | Stockholders Equity |
| 0.00 | 92.66B | 88.76B | 77.77B | 71.76B | 65.49B |
| Cash Flow | Free Cash Flow | ||||
| 24.86B | 20.70B | 25.68B | 23.40B | 19.89B | 20.12B | Operating Cash Flow |
| 28.52B | 24.20B | 29.07B | 26.21B | 22.34B | 22.17B | Investing Cash Flow |
| -14.26B | -20.53B | -15.57B | -28.48B | -10.37B | -12.53B | Financing Cash Flow |
| -11.64B | -3.51B | -11.53B | 4.23B | -7.46B | -3.59B |
UnitedHealth Technical Analysis
Negative
291.91
Price Trends
468.08
Negative
489.66
Negative
531.43
Negative
Market Momentum
-50.28
Positive
19.76
Positive
14.78
Positive
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 291.91 is below the 20-day moving average (MA) of 384.28, below the 50-day MA of 468.08, and below the 200-day MA of 531.43, indicating a bearish trend. The MACD of -50.28 indicates Positive momentum. The RSI at 19.76 is Positive, neither overbought nor oversold. The STOCH value of 14.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UNH.
UnitedHealth Risk Analysis
UnitedHealth disclosed 20 risk factors in its most recent earnings report. UnitedHealth reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
UnitedHealth Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $30.74B | 9.20 | 12.59% | ― | 8.85% | 33.30% | |
74 Outperform | $85.74B | 17.78 | 12.37% | 1.78% | 25.21% | -29.37% | |
71 Outperform | $91.12B | 15.74 | 14.24% | 1.64% | 6.63% | -3.26% | |
67 Neutral | $79.10B | 14.94 | 7.00% | 4.25% | 4.84% | -26.54% | |
67 Neutral | $28.72B | 16.83 | 10.09% | 1.49% | 10.09% | -12.18% | |
66 Neutral | $264.80B | 12.20 | 24.33% | 2.88% | 8.68% | 45.24% | |
52 Neutral | $5.15B | 3.02 | -44.64% | 2.83% | 16.44% | -0.47% |
* Healthcare Sector Average
Performance Comparison
UNH
UnitedHealth
291.91
-217.18
-42.66%
CNC
Centene
61.78
-15.79
-20.36%
CI
Cigna
320.94
-6.80
-2.07%
CVS
CVS Health
62.53
7.67
13.98%
HUM
Humana
237.96
-113.03
-32.20%
ELV
Elevance Health
403.29
-130.64
-24.47%
UnitedHealth Earnings Call Summary
Earnings Call Date:Apr 17, 2025
(Q1-2025)
| % Change Since: -50.10%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong business growth in areas like Medicare Advantage and Optum Rx, but was overshadowed by challenges including unexpected increases in care activity and issues with Medicare member profiles, leading to a lowered earnings outlook.Q1-2025 Updates
Positive Updates
UnitedHealthcare Medicare Advantage Growth
UnitedHealthcare's Medicare Advantage business is on pace to serve an additional 800,000 people this year.
Optum Health Value-Based Care Expansion
Optum Health is on track to add 650,000 net new patients to value-based care arrangements.
Optum Rx Strong Performance
Optum Rx is experiencing a strong selling season with new wins and high retention of long-term customers, underscoring the value PBMs play in reducing drug prices.
Increased Digital Engagement
UnitedHealth Group's new tools have led to a more than 40% increase in digital engagement among senior members.
Negative Updates
Unexpected Increase in Care Activity
First-quarter 2025 care activity in UnitedHealthcare's Medicare Advantage business increased at twice the planned rate, notably in physician and outpatient services.
Challenges with Medicare Member Profiles
Changes in Optum's Medicare membership profiles led to 2025 revenue impacts due to lower-than-expected engagement and reimbursement levels.
Higher Medical Care Ratio
The full-year medical care ratio is now expected to be 87.5%, reflecting higher utilization among senior populations and the revenue profile of Optum Health.
Disappointment in Adjusted Earnings Outlook
The adjusted earnings per share outlook for the year was revised to $26 to $26.50, lower than previously expected.
Company Guidance
During the UnitedHealth Group First Quarter 2025 Earnings Conference Call, CEO Andrew Witty provided guidance on several key metrics. The company revised its adjusted earnings per share outlook for the year to a range of $26 to $26.50, citing unusual performance issues primarily due to increased care activity and changes in member profiles in its Medicare businesses. UnitedHealthcare's Medicare Advantage business experienced a care activity increase that was twice the rate anticipated, particularly in physician and outpatient services. Despite these challenges, UnitedHealthcare is on track to serve an additional 800,000 people in Medicare Advantage, and Optum Health aims to add 650,000 net new patients to value-based care arrangements. The company's consolidated revenue outlook remains at $450 billion to $455 billion, with expected revenue increases in UnitedHealthcare and Optum Rx offsetting a reduced outlook for Optum Health. The full-year medical care ratio is projected at 87.5% plus or minus 50 basis points, reflecting higher utilization across senior populations. UnitedHealth Group remains committed to addressing these issues and returning to its long-term earnings per share growth target of 13% to 16%.UnitedHealth Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
UnitedHealth CEO Transition Amid Financial Uncertainty
Negative
May 14, 2025
On May 12, 2025, UnitedHealth Group announced that CEO Andrew Witty would step down, with Steve Hemsley taking over as CEO while continuing as Board Chair. The company also suspended its 2025 outlook due to higher-than-expected medical expenditures, with plans to return to growth in 2026.
The most recent analyst rating on (UNH) stock is a Buy with a $647.00 price target. To see the full list of analyst forecasts on UnitedHealth stock, see the UNH Stock Forecast page.
Spark’s Take on UNH Stock
According to Spark, TipRanks’ AI Analyst, UNH is a Neutral.
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.
To see Spark’s full report on UNH stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.