‘Load Up on the Dip,’ Says Top Investor About UnitedHealth Stock

How can we put it gently? It’s been a very bad month for UnitedHealth (NYSE:UNH) investors. The company has lost nearly half its value since mid-April, following a slate of troublesome developments.

A rare earnings miss in Q1 2025, the withdrawal of full-year guidance, and the sudden resignation of its CEO were all signs of trouble. Adding to the misery, the Trump administration has suggested it might eliminate pharmacy benefit managers (UnitedHealth’s Optum Rx generated $130 billion in revenue last year). And to top it off, there are reports that the U.S. Department of Justice is investigating UnitedHealth for potential Medicare fraud.

So, should investors read the tea leaves and get out of dodge before the situation gets even worse?

One top investor, known by the pseudonym Juxtaposed Ideas, doesn’t think so. Instead of sounding the alarm, Juxtaposed is choosing to find a silver lining in what’s been a bleak month.

“The selloff has triggered a rich near-doubling upside potential and expanded dividend yields, offering investors an excellent margin of safety,” says the 5-star investor, who is among the top 4% of TipRanks’ stock pros.

Indeed, UNH shares are now trading at valuations not seen since the COVID crash of March 2020. Its Forward P/E of 12.45x is well below both its historical average and the sector median.

Juxtaposed reminds investors that UnitedHealth is still the leading health insurer in the U.S. and remains financially solid. In Q1 2025, the company generated $5.45 billion in cash from operations, up 129% from the previous quarter and 378% year-over-year.

The investor is “not overly concerned” by growing net debt, pointing out that the company is generating sufficient income to comfortably pay its quarterly dividends.

The investor does sound a note of caution, pointing out that UnitedHealth’s recovery may take time as broader market headwinds continue to weigh on the healthcare sector.

Still, Juxtaposed remains firmly in the bull camp, calling UNH stock a solid long-term play and reiterating a Strong Buy rating. (To watch Juxtaposed Ideas’ track record, click here)

Wall Street appears to share that conviction. UNH commands a Moderate Buy consensus rating from 26 analysts, including 19 Buys, 6 Holds, and just 1 Sell. The average price target of $380.59 points to a potential upside of ~27% from current levels. (See UNH stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.