Is UnitedHealth a Buy for Long-Term Investors?

Core Viewpoint - UnitedHealth Group has seen a significant decline in its stock price, dropping over 40% and becoming the worst-performing stock in the Dow Jones Industrial Average this year [1][2] Group 1: Stock Performance and Earnings Guidance - The company's stock price is heavily influenced by quarterly earnings perceptions, with a decline in share price following disappointing earnings guidance [3] - UnitedHealth's management initially guided earnings per share (EPS) for 2024 at $28.15 to $28.65, but revised this down to a range of $24.65 to $25.15 after the first-quarter earnings report [4] - The downward revision in guidance is attributed to higher-than-expected utilization rates in Medicare Advantage and struggles in the Optum Health division due to reimbursement issues [5] Group 2: Management Changes and Investigations - The resignation of CEO Andrew Witty and the announcement of a Department of Justice investigation into Medicare billing practices have further unsettled investors [6] - Management has denied the allegations of fraudulent activity, labeling the report as "deeply irresponsible" [7] Group 3: Valuation and Investment Outlook - As of June 3, shares are trading around $300, close to a five-year low, and the company's forward price-to-earnings (P/E) ratio has significantly compressed [9][12] - Despite recent challenges, management has indicated a potential return to growth by next year, and insider buying from the new CEO and other executives suggests confidence in the company's long-term prospects [13][14] - The current valuation presents a potential buying opportunity for long-term investors, despite expected near-term volatility [15]