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Unitedhealth Group Inc. (UNH)
:UNH

UnitedHealth (UNH) AI Stock Analysis

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UnitedHealth

(NYSE:UNH)

Rating:69Neutral
Price Target:
$332.00
▲(5.89%Upside)
UnitedHealth's strong financial performance and reasonable valuation are overshadowed by bearish technical indicators and challenges detailed in the recent earnings call. The CEO transition adds uncertainty, though the company's strategic growth focus provides some optimism. Investors should monitor the impact of increased care activity and member profile changes on future performance.
Positive Factors
Earnings
The 2026 rate update of +5% should help offset cost trends as UnitedHealth Group tries to recapture margins in 2026.
Leadership
The new CEO is expected to guide conservatively, potentially leaving room for the company to beat guidance.
Strategic Initiatives
UNH plans to provide more transparency around Optum Health with new initiatives related to risk assessment coding.
Negative Factors
Market Rating
Shares of UNH have been downgraded from Buy to Hold, with a reduced price target from $520 to $308, suggesting a lack of expected growth.
Medicare Advantage
There is an expectation that the MA margins are unlikely to return to the target margins in 2026 due to incremental pressure from changes and high-cost trends.
Regulatory Risks
There is further uncertainty due to a potential criminal investigation highlighted in a WSJ article, although UNH has stated they have not been notified by the DOJ.

UnitedHealth (UNH) vs. SPDR S&P 500 ETF (SPY)

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 through its diverse range of healthcare services and products. The primary source of income comes from premiums collected by UnitedHealthcare from its insurance products, which cover a broad spectrum of health benefits for both individuals and organizations. OptumHealth contributes to the revenue with its health management and care delivery services, earning money through fees for service and care coordination. OptumInsight derives revenue from providing data analytics, technology solutions, and consulting services to healthcare entities. OptumRx generates income through pharmacy benefit management, including prescription drug sales, home delivery, and specialty pharmacy services. Together, these segments enable UnitedHealth Group to capitalize on the growing demand for integrated healthcare solutions. Strategic partnerships with healthcare providers, government agencies, and technology firms also play a crucial role in expanding its service offerings and market reach, further driving its profitability.

UnitedHealth Key Performance Indicators (KPIs)

Any
Any
People Served
People Served
Indicates the number of individuals covered or benefiting from services, reflecting market reach and customer base expansion.
Chart InsightsUnitedHealthcare's recent decline in people served is concerning, reflecting challenges in its Medicare Advantage business, where care activity surged unexpectedly. Despite this, the company plans to expand its Medicare Advantage reach by 800,000 people. Optum Health's growth in value-based care is promising, though its recent dip in people served suggests revenue pressures. The earnings call highlights a strategic focus on digital engagement and Optum Rx's robust performance, which may help offset these challenges. Investors should watch for how these dynamics impact UnitedHealth's long-term growth targets.
Data provided by:Main Street Data

UnitedHealth Earnings Call Summary

Earnings Call Date:Apr 17, 2025
(Q1-2025)
|
% Change Since: -46.41%|
Next Earnings Date:Jul 29, 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 Financial Statement Overview

Summary
UnitedHealth exhibits a strong financial profile characterized by consistent revenue growth, robust profit margins, and effective cash flow management. The company's leverage is well-controlled, supporting financial stability, while profitability metrics indicate efficient operations. Overall, UnitedHealth is well-positioned within the industry, with a solid foundation for future growth, though ongoing attention to margin stability and leverage is advisable.
Income Statement
90
Very Positive
UnitedHealth has demonstrated strong revenue growth with a consistent upward trajectory in total revenue over the past years, highlighted by a 22.97% increase from 2021 to 2022. The TTM (Trailing-Twelve-Months) gross profit margin of 21.49% and net profit margin of 5.43% reflect robust profitability. The EBIT and EBITDA margins underscore operational efficiency, with EBIT margin at 8.21% and EBITDA margin at 7.89%. These metrics indicate a solid financial performance, though slight fluctuations in margins warrant monitoring.
Balance Sheet
85
Very Positive
The balance sheet reflects a stable financial position with a modest debt-to-equity ratio of 0.85, indicating prudent leverage. The return on equity (ROE) of 23.26% for TTM suggests efficient use of equity capital to generate profits. However, the equity ratio at 30.67% shows a moderate level of equity financing. The balance between liabilities and equity appears well-managed, with a focus on maintaining long-term solvency.
Cash Flow
88
Very Positive
Cash flow analysis reveals strong operational cash generation, with an operating cash flow to net income ratio of 1.29 for TTM, highlighting effective conversion of profits into cash. Free cash flow has shown consistent growth, with a recent increase of 20.10% from 2024 to TTM. The free cash flow to net income ratio of 1.12 reflects healthy cash flow management, ensuring sufficient liquidity for reinvestment and shareholder returns.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
407.42B400.28B367.53B322.13B285.27B255.64B
Gross Profit
87.53B89.40B86.87B77.59B67.33B65.50B
EBIT
33.48B32.29B32.36B28.43B23.97B22.41B
EBITDA
32.14B9.77B32.52B31.84B27.07B25.30B
Net Income Common Stockholders
22.11B14.40B22.38B20.12B17.29B15.40B
Balance SheetCash, Cash Equivalents and Short-Term Investments
46.50B29.11B29.63B27.91B23.91B19.78B
Total Assets
283.68B298.28B273.72B245.71B212.21B197.29B
Total Debt
70.59B76.90B62.54B57.62B46.00B43.47B
Net Debt
28.68B51.59B37.11B34.26B24.63B26.55B
Total Liabilities
193.06B195.69B174.80B159.36B135.73B126.75B
Stockholders Equity
81.31B92.66B88.76B77.77B71.76B65.49B
Cash FlowFree Cash Flow
24.86B20.70B25.68B23.40B19.89B20.12B
Operating Cash Flow
28.52B24.20B29.07B26.21B22.34B22.17B
Investing Cash Flow
-14.26B-20.53B-15.57B-28.48B-10.37B-12.53B
Financing Cash Flow
-11.64B-3.51B-11.53B4.23B-7.46B-3.59B

UnitedHealth Technical Analysis

Technical Analysis Sentiment
Negative
Last Price313.53
Price Trends
50DMA
391.84
Negative
100DMA
449.76
Negative
200DMA
506.30
Negative
Market Momentum
MACD
-18.79
Negative
RSI
41.38
Neutral
STOCH
87.35
Negative
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 313.53 is above the 20-day moving average (MA) of 303.64, below the 50-day MA of 391.84, and below the 200-day MA of 506.30, indicating a neutral trend. The MACD of -18.79 indicates Negative momentum. The RSI at 41.38 is Neutral, neither overbought nor oversold. The STOCH value of 87.35 is Negative, 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 (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
CNCNC
77
Outperform
$27.50B8.2512.59%8.85%33.30%
HUHUM
72
Outperform
$28.00B16.4010.09%1.51%10.09%-12.18%
ELELV
71
Outperform
$86.07B14.8614.24%1.80%6.63%-3.26%
UNUNH
69
Neutral
$281.72B12.9824.33%2.64%8.68%45.24%
CICI
69
Neutral
$82.87B17.1912.37%1.92%24.65%48.38%
CVCVS
69
Neutral
$83.14B15.707.00%4.01%4.84%-26.54%
54
Neutral
$5.41B3.27-45.10%3.29%16.81%0.02%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UNH
UnitedHealth
313.53
-175.77
-35.92%
CNC
Centene
55.22
-13.71
-19.89%
CI
Cigna
317.40
-10.03
-3.06%
CVS
CVS Health
67.46
9.90
17.20%
HUM
Humana
235.26
-119.40
-33.67%
ELV
Elevance Health
384.55
-141.95
-26.96%

UnitedHealth Corporate Events

Executive/Board ChangesShareholder Meetings
UnitedHealth Cancels Stock Units for Former CEO
Neutral
Jun 4, 2025

On June 2, 2025, UnitedHealth Group’s Board of Directors canceled performance-based restricted stock units for former CEO Andrew Witty following his retirement. During the same day, the company held its 2025 Annual Meeting of Shareholders, where nine directors were elected, executive compensation was approved, Deloitte & Touche LLP’s appointment was ratified, and a shareholder proposal on golden parachutes was rejected.

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.

Executive/Board ChangesShareholder Meetings
UnitedHealth Board Accepts Andrew Witty’s Resignation
Neutral
May 21, 2025

On May 20, 2025, UnitedHealth Group’s Board of Directors accepted the resignation of Andrew Witty as a director, effective immediately. Consequently, Mr. Witty will not seek re-election at the upcoming annual shareholder meeting on June 2, 2025.

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.

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.

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.