Core Viewpoint - UnitedHealth Group is expected to report a significant decline in earnings for Q2 2025, with projected earnings per share of $4.94, representing a 27.4% decrease year-over-year, despite a revenue increase of 12.9% to $111.6 billion [1][2][8]. Financial Performance - The Zacks Consensus Estimate for UnitedHealth's total revenues for the current year is $448.53 billion, indicating a year-over-year rise of 12.1, while the earnings per share estimate is $21.38, reflecting a 22.7% decline from the previous year [3]. - The company has beaten earnings estimates in three of the last four quarters, with an average surprise of 1.2% [4]. - The earnings whisper model indicates a negative Earnings ESP of -13.10% and a Zacks Rank of 4 (Sell), suggesting a low probability of an earnings beat this quarter [5]. Revenue Drivers - Premium revenues are expected to grow by 13.4% year-over-year, supported by contributions from the UnitedHealthcare division [9]. - The total domestic commercial customers are projected to increase by 1.5%, with Medicare Advantage members expected to rise by 6.9% and Medicaid memberships by 3.3% [10]. - Service revenues from the Optum brand are anticipated to increase by 7%, while product revenues are expected to rise by 11% [11]. Cost and Margin Pressures - Rising medical costs and increased healthcare utilization, particularly in Medicare Advantage, are expected to elevate overall expenses by 14.1% year-over-year, impacting margins [12]. - The medical care ratio is projected to increase to 88.6%, up from 85.1% in the previous year, with medical costs expected to rise by 14.9% [13]. Stock Performance and Valuation - UnitedHealth's stock has declined by 42.2% year-to-date, underperforming the industry average decline of 34.3% and the S&P 500's growth of 7.6% [14]. - The current valuation of UnitedHealth is 12.58X forward 12-month earnings, above the industry average of 11.58X, indicating a stretched valuation despite the price drop [18]. Strategic Challenges - The company has been removed from major Russell growth indices due to declining stock price and growth profile, with rising medical costs and high-acuity patient volumes compressing margins [20]. - Recent leadership changes and regulatory risks surrounding the Optum Rx segment have further shaken investor confidence, leading to perceptions of UnitedHealth as a risky investment [21].

UnitedHealth Group Today UNH UnitedHealth Group $425.39 -28.72 (-6.32%) 52-Week Range $424.81 ▼ $630.73 Dividend Yield 1.97% P/E Ratio 27.44 Get UnitedHealth Group alerts: Price Target $610.24 The company's stock had been recovering off its double-bottom support levels around $435, rebounding as high as $606.36 on Apr. 11, 2025, ahead of its first quarter 2025 earnings report. Add to Watchlist Indeed, it rose from a pariah back to pole position as health insurance stocks were seen as recession-resistant saf ...