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UnitedHealth (UNH)
NYSE:UNH
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UnitedHealth
(NYSE:UNH)
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Rating:65Neutral
Price Target:
$304.00
▲(10.18% Upside)
UNH scores as solid but not standout: strong cash generation and scale support the rating, but meaningful margin/return compression and a weaker price trend weigh on it. Valuation is helped by the dividend yet moderated by a mid-to-high P/E, while earnings-call guidance is constructive but balanced by sizable membership declines and ongoing medical cost/funding headwinds.
Positive Factors
Cash generation & conversion
Very strong operating and free cash flow with high conversion vs. net income provides durable funding for capex, technology investment, dividends and debt reduction. Reliable cash generation cushions execution risk and supports strategic initiatives over the next 2–6 months.
Scale & diversified revenue base
Material scale across UnitedHealthcare and Optum yields durable competitive advantages: negotiating leverage, diversified revenue streams, and resilience to localized disruptions. Large, growing top line supports long‑term contract wins and investments in population health capabilities.
Structural operational improvements & AI investment
Meaningful, ongoing investments in AI, EMR consolidation and network optimization are structural: they improve unit economics, reduce operating costs, and enable scale benefits in Optum and UHC. These initiatives can sustainably raise margins if execution persists.
Negative Factors
Margin compression
Material decline in net margin erodes return on capital and reduces buffer for cost shocks. Persistently lower profitability requires sustained execution to restore margins and limits flexibility for reinvestment, buybacks or dividend growth until structural trends reverse.
Rising leverage
Notable increase in absolute debt raises balance sheet sensitivity to interest and credit cycles and constrains strategic optionality. While management targets reduced leverage, elevated debt limits near‑term capital allocation flexibility and increases execution risk around returning capital.
Structural membership & funding headwinds
Large planned membership reductions and Medicaid/Medicare funding pressure change revenue mix and pricing dynamics. Rightsizing restores margins but reduces scale and revenue predictability, and regulatory funding shifts (CMS notices) add persistent downside risk to enrollment and long‑term growth.
UnitedHealth (UNH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$249.94B
Dividend Yield2.69%
Average Volume (3M)8.87M
Price to Earnings (P/E)21.5
Beta (1Y)0.14
Revenue Growth10.48%
EPS Growth24.25%
CountryUS
Employees400,000
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)2.11
Shares Outstanding905,838,600
10 Day Avg. Volume16,685,226
30 Day Avg. Volume8,865,659
Financial Highlights & Ratios
PEG Ratio165.13
Price to Book (P/B)3.00
Price to Sales (P/S)0.67
P/FCF Ratio9.39
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit3.54
Enterprise Value/Ebitda12.73
Forecast
1Y Price Target
$368.50Price Target Upside33.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)17.82
Revenue Forecast (FY)$442.74B
UnitedHealth Business Overview & Revenue Model
Company DescriptionUnitedHealth 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 MoneyUnitedHealth Group generates revenue primarily through its health insurance offerings and health services. The UnitedHealthcare segment earns revenue from premiums paid by individuals and employers for health plans, as well as from government programs like Medicare and Medicaid. Optum contributes significantly to the company's revenue through its pharmacy care services, where it manages prescription drug benefits and retail pharmacy operations, and through its health services that focus on data analytics and care management. Key revenue streams include premium revenues, service fees, and the management of pharmacy benefit plans. Additionally, strategic partnerships with employers, healthcare providers, and government agencies enhance its service offerings and revenue potential, while investments in technology and analytics help drive efficiencies and improve care outcomes.
UnitedHealth Key Performance Indicators (KPIs)
Any
Revenue by Type
Categorizes income by source, such as premiums, services, or products, revealing diversification and potential vulnerabilities in revenue streams.
Categorizes income by source, such as premiums, services, or products, revealing diversification and potential vulnerabilities in revenue streams.
Data provided by:
The Fly
The FlyUnitedHealth Earnings Call Summary
Earnings Call Date:Jan 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Neutral
Mixed. The company reported solid 2025 revenue growth (+12%) and adjusted EPS slightly ahead of expectations, provided positive 2026 adjusted EPS guidance (> $17.75, ≥8.6% growth), and outlined multiple operational improvements (Optum wins, AI-driven cost reductions, technology investment, OptumHealth restructuring progress). However, material near-term headwinds remain: large anticipated membership contractions across Medicare, Medicaid and exchange markets; significant restructuring and reserve charges tied to Optum actions; persistent elevated medical cost trends (Medicare trend ~10% in 2026); and funding shortfalls from Medicare and Medicaid that may force further benefit and footprint adjustments. Management projects margin recovery but expects some delay until 2027, making the tone cautiously constructive but balanced between clear positives and notable risks.Q4-2025 Updates
Positive Updates
Adjusted EPS and 2026 Guidance
Reported adjusted EPS of $16.35 for full year 2025 (slightly ahead of expectations). 2026 initial outlook: adjusted EPS greater than $17.75, implying at least 8.6% growth year-over-year.
Strong 2025 Revenue and Cash Generation
Full year 2025 revenues nearly $448 billion, up ~12% versus 2024. Operating cash flow $19.7 billion (~1.5x net income); 2026 cash flow guidance at least $18 billion (~1.1x net income).
Optum Segment Improvement Plans and Wins
Optum segments forecast low- to high-single-digit adjusted earnings growth in 2026 with margin expansion (OptumInsight ~+90 bps, OptumHealth ~+30 bps, OptumRx ~+20 bps). OptumRx won >800 new customers and reported >95% of customers electing full rebate pass-through in 2026; removed reauthorization requirements for ~180 drugs.
UnitedHealthcare Operating Earnings Recovery
UnitedHealthcare expected to deliver ~13% adjusted operating earnings growth in 2026 with operating earnings margins expanding ~40 basis points. Actions include deliberate repricing/product repositioning to restore margin.
AI and Productivity Initiatives
Anticipated operating cost reductions of nearly $1 billion in 2026 driven largely by AI and machine learning; over 80% of member calls leverage AI tools. Planned technology investment of nearly $1.5 billion in 2026 (with similar spending expected in 2027).
OptumHealth Operational Progress
OptumHealth narrowed affiliated network by ~20%, streamlined risk membership by ~15%, and consolidated EMR usage from 18 systems to three (nearly 100% of employee provider groups), improving consistency and enabling faster AI deployment. Examples of mature markets show total cost of care reductions up to ~30% and NPS near 90.
Balance Sheet and Capital Targets
Expect to continue improving leverage through 2026, target long-term debt-to-capital ~40% before year-end, and to return to historical capital deployment practices in the second half of 2026.
Negative Updates
Large Membership Contraction in 2026
Company expects significant membership declines in 2026: UnitedHealthcare membership contraction of 2.3 million to 2.8 million overall; Medicare Advantage contraction of ~1.3 million to 1.4 million; Medicaid membership contraction of ~565,000 to 715,000. Exchange business decline >500,000.
Significant Charge and Restructuring Items
Quarter included a largely non-cash $1.6 billion net-of-tax charge (reported as $1.78 per share) tied to Optum actions. Management detailed restructuring and related items including: ~$800 million reserve/collection expectations (cyber-related provider loans/receivables), ~$625 million lost contract reserve for unprofitable third-party relationships, and material restructuring actions (workforce, real estate, contract reassessments).
Medicare and Medicaid Funding Headwinds
Third year of Medicare funding reductions and state Medicaid funding shortfalls expected to pressure results. Company noted the 2025 Medicare medical cost trend ~7.5% and expects Medicare trend of ~10% in 2026, driving margin/headwind dynamics and likely benefit/footprint adjustments in 2027 if advance notice rates are finalized as proposed.
OptumHealth Volatility and Q4 Underperformance
OptumHealth reported Q4 volatility and underperformance versus expectations driven by restructuring and one-time items; management indicated fourth quarter adjusted baseline reduced to approximately $1.5 billion (excluding restructuring and the Optum Financial move) and acknowledged the need for continued operational execution to reach long-term margin targets.
Near-Term Margin and Membership Tradeoffs
Repricing and product rightsizing to restore margins will result in near-term membership contractions (commercial and individual ACA repricing, voluntary pledge to rebate ACA market profits), and management expects operating margins to remain slightly below historical range until 2027 despite planned 2026 margin expansion.
Medical Care and Operating Cost Ratios Impacted by Charges
Full year 2025 medical care ratio was 89.1% (slightly better than expectations); operating cost ratio was 13.3% (higher than anticipated partly due to ~40 bps of charge-related impacts and ~$800 million in employee/incentive/Foundation funding). 2026 medical care ratio guidance is 88.8% ±50 bps and operating cost ratio guidance is 12.8% ±50 bps, indicating continued sensitivity to cost and charge items.
Company Guidance
UnitedHealth guided to 2026 adjusted EPS of greater than $17.75 (at least +8.6% vs FY‑2025 adjusted EPS of $16.35) and GAAP net earnings of at least $17.10 per share, with revenues around $440 billion (FY‑2025 revenues were nearly $448B, +12% YoY) and at least $18B of cash from operations in 2026 (~1.1x net income vs $19.7B or ~1.5x in 2025); they expect roughly two‑thirds of 2026 earnings in H1, a medical care ratio of ~88.8% ±50 bps (FY‑2025 MCR 89.1%), an operating cost ratio of ~12.8% ±50 bps (FY‑2025 13.3%), and progress toward a long‑term debt‑to‑capital target of ~40% by year‑end with capital returns resuming in H2. Segment and operating guidance includes ~13% adjusted operating earnings growth at UnitedHealthcare with ~40 bps operating margin expansion and total UHC membership contraction of 2.3–2.8 million (Medicare Advantage down ~1.3–1.4M; Medicaid down ~565–715k) and ~50 bps Medicare margin improvement; Optum segments are expected to deliver low‑ to high‑single‑digit adjusted growth overall, with OptumRx margin expansion ~20 bps (implementation of >800 new customers, >95% of customers electing full rebate pass‑through in 2026), OptumInsight >4% growth and ~90 bps margin expansion (including alignment of Optum Financial), and OptumHealth ~9% operating earnings growth with ~30 bps margin expansion (long‑run target 6–8%), supported by actions such as narrowing affiliated networks ~20%, streamlining risk membership ~15%, nearly 100% of employee provider groups on one of three EMRs (vs 18 previously), AI‑enabled operating cost reductions of nearly $1B in 2026, planned tech/AI investment of ~$1.5B in 2026, and >80% of member calls leveraging AI; FY‑2025 results excluded a $1.6B net‑of‑tax charge ($1.78/sh) tied to Optum actions, including ~ $800M cyber‑related true‑up, a ~$440M portfolio optimization net gain, and ~$2.5B of restructuring/related charges (including ~ $625M lost contract reserve).UnitedHealth Financial Statement Overview
Summary
Strong multi-year revenue growth and standout cash generation (2025 operating cash flow $38.3B; free cash flow $32.0B, with high net-income conversion). Offsetting this, profitability and returns have compressed since 2023 (2025 net margin ~3.2%) and debt has risen over time, making the outlook more execution-dependent on margin stabilization.Income Statement
Revenue has compounded strongly over the last several years (from $257.1B in 2020 to $447.6B in 2025), indicating durable demand and scale. However, profitability has compressed meaningfully: gross margin fell to 18.5% in 2025 from ~22–26% in prior years, and net margin declined to 3.2% in 2025 from ~6.0–6.2% in 2020–2023. Net income was essentially flat versus 2024 ($14.2B vs. $14.4B) and well below 2022–2023 levels, reflecting weaker earnings conversion despite continued top-line growth.72
Positive
Balance Sheet
The balance sheet is supported by a sizable equity base ($100.1B in 2025) and growing assets ($309.6B). Leverage is moderate for a large insurer, with debt-to-equity around 0.78 in 2025 (roughly in line with recent years), but total debt has risen notably over time ($43.5B in 2020 to $78.4B in 2025). Returns on equity remain solid (14.2% in 2025), though they have stepped down from the stronger 2021–2023 range (~24–26%), consistent with the recent profitability pressure.68
Positive
Cash Flow
Cash generation is a key strength: operating cash flow rebounded sharply to $38.3B in 2025 from $24.2B in 2024, and free cash flow rose to $32.0B. Free cash flow growth was very strong in 2025 (+84%), and free cash flow covered a large portion of net income (about 84% in 2025, consistently ~85–91% across the period), suggesting high-quality earnings and strong cash conversion. A watch item is that cash flow relative to revenue remains modest (operating cash flow at ~33% of revenue in 2025 based on the provided ratio), even though it improved versus 2024.82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 447.57B | 400.28B | 371.62B | 324.16B | 287.60B |
| Gross Profit | 82.92B | 89.40B | 90.96B | 79.62B | 69.65B |
| EBITDA | 23.06B | 28.08B | 36.33B | 31.84B | 27.07B |
| Net Income | 14.23B | 14.40B | 22.38B | 20.12B | 17.29B |
Balance Sheet | |||||
| Total Assets | 309.58B | 298.28B | 273.72B | 245.71B | 212.21B |
| Cash, Cash Equivalents and Short-Term Investments | 28.12B | 29.11B | 29.63B | 27.91B | 23.91B |
| Total Debt | 78.39B | 76.90B | 67.44B | 57.62B | 46.00B |
| Total Liabilities | 207.88B | 195.69B | 174.80B | 159.36B | 135.73B |
| Stockholders Equity | 100.09B | 92.66B | 88.76B | 77.77B | 71.76B |
Cash Flow | |||||
| Free Cash Flow | 31.99B | 20.70B | 25.68B | 23.40B | 19.89B |
| Operating Cash Flow | 38.29B | 24.20B | 29.07B | 26.21B | 22.34B |
| Investing Cash Flow | -14.76B | -20.53B | -15.57B | -28.48B | -10.37B |
| Financing Cash Flow | -22.26B | -3.51B | -11.53B | 4.23B | -7.46B |
UnitedHealth Technical Analysis
Negative
275.92
Price Trends
327.23
Negative
335.13
Negative
322.10
Negative
Market Momentum
-13.88
Positive
29.31
Positive
5.32
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 275.92 is below the 20-day moving average (MA) of 323.10, below the 50-day MA of 327.23, and below the 200-day MA of 322.10, indicating a bearish trend. The MACD of -13.88 indicates Positive momentum. The RSI at 29.31 is Positive, neither overbought nor oversold. The STOCH value of 5.32 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $9.15B | 11.04 | 19.71% | ― | 13.71% | -18.02% | |
69 Neutral | $23.10B | 18.09 | 7.15% | 1.38% | 9.87% | -5.58% | |
65 Neutral | $249.94B | 21.47 | ― | 2.69% | 10.48% | 24.25% | |
65 Neutral | $75.69B | 13.43 | 13.29% | 1.99% | 11.96% | -11.11% | |
62 Neutral | $95.51B | 200.76 | 0.63% | 3.41% | 6.71% | -90.11% | |
58 Neutral | $20.13B | -3.79 | -21.93% | ― | 14.92% | -286.72% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
UNH
UnitedHealth
275.92
-241.38
-46.66%
CNC
Centene
40.96
-17.67
-30.14%
CVS
CVS Health
75.24
22.99
44.01%
HUM
Humana
192.07
-83.66
-30.34%
MOH
Molina Healthcare
178.04
-106.97
-37.53%
ELV
Elevance Health
340.60
-42.46
-11.08%
UnitedHealth Corporate Events
Business Operations and StrategyFinancial Disclosures
UnitedHealth Reaffirms 2025 EPS Outlook to Investors
Positive
Jan 12, 2026
On January 12, 2026, UnitedHealth Group’s senior management planned to meet with investors to discuss the company’s outlook and operations. During these meetings, management intended to reaffirm the company’s previously disclosed adjusted 2025 earnings per share expectations, while cautioning that full-year 2025 financial closing procedures were still in progress and that final results could differ from the indicated ranges once reviews and final adjustments are completed.
The most recent analyst rating on (UNH) stock is a Buy with a $400.00 price target. To see the full list of analyst forecasts on UnitedHealth stock, see the UNH Stock Forecast page.
Executive/Board Changes
UnitedHealth Appoints Scott Gottlieb as Independent Director
Positive
Nov 21, 2025
On November 18, 2025, UnitedHealth Group announced the appointment of Scott Gottlieb, M.D. as an independent director. Dr. Gottlieb, known for his tenure as FDA commissioner from 2017 to 2019, is recognized for his efforts in promoting transparency, patient safety, and medical innovation. His appointment is expected to bring valuable insights to UnitedHealth, given his extensive experience in healthcare policy and regulation.
The most recent analyst rating on (UNH) stock is a Hold with a $335.00 price target. To see the full list of analyst forecasts on UnitedHealth stock, see the UNH Stock Forecast page.
Business Operations and StrategyRegulatory Filings and Compliance
UnitedHealth Updates Bylaws for Delaware Compliance
Neutral
Nov 13, 2025
On November 6, 2025, UnitedHealth Group’s Board of Directors approved an amendment to the company’s bylaws to update its registered office and agent in Delaware. This administrative change is expected to streamline the company’s operations and ensure compliance with state regulations.
The most recent analyst rating on (UNH) stock is a Buy with a $400.00 price target. To see the full list of analyst forecasts on UnitedHealth stock, see the UNH Stock Forecast page.
Business Operations and Strategy
UnitedHealth to Participate in UBS Healthcare Conference
Neutral
Nov 7, 2025
UnitedHealth Group announced that its senior leaders will participate in the UBS Global Healthcare Conference 2025 on November 10, 2025. They will discuss the company’s strategy, market positions, recent results, and expectations for its end markets, which could impact its operations and industry positioning.
The most recent analyst rating on (UNH) stock is a Buy with a $386.00 price target. To see the full list of analyst forecasts on UnitedHealth stock, see the UNH Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.