UnitedHealth(US:UNH) The Motley Foolยท2025-06-24 09:46Core Viewpoint - UnitedHealth Group presents a rare investment opportunity as its stock has declined approximately 50% from its peak, making it a potential buy for long-term investors [2][5]. Company Overview - UnitedHealth Group is the largest health insurer in the U.S. and ranks among the largest companies in the healthcare sector by market capitalization [4]. - The company's Optum Rx unit is the third-largest pharmacy benefits manager (PBM) [4]. Financial Performance - Over the past decade, UnitedHealth Group's trailing-12-month revenue has increased by approximately 260%, and its earnings have nearly tripled [5]. - The stock price has fallen around 50% from its peak in Q4 2024, marking it as a beaten-down blue chip stock [5]. Recent Challenges - The company suspended its full-year 2025 guidance due to higher-than-expected Medicare Advantage costs and the unexpected resignation of former CEO Andrew Witty [6]. - A criminal investigation by the U.S. Department of Justice into potential Medicare fraud has been reported [6]. - Political pressures, including President Trump's intention to reform PBMs, have added to the company's challenges [6]. Historical Context - The last significant decline of UnitedHealth Group's stock by 50% or more occurred during the financial crisis of 2008-2009 and previously in 1992-1993 [7]. - Historical data shows that investing after such declines has yielded substantial returns for patient investors [9][10]. Future Outlook - Many of the current issues facing UnitedHealth Group are expected to be temporary, with increased premiums likely to offset higher Medicare Advantage costs [12]. - The return of former CEO Stephen Hemsley is seen as a positive move to stabilize the company [12]. - The potential DOJ investigation may result in fines but is not expected to have a long-term detrimental impact [13]. - Regulatory changes affecting PBMs are anticipated, but the company is expected to navigate these challenges effectively [14].