$UNH is crashing.
Here is everything you need to know about $UNH right now:
$UNH is now down nearly 47% in the last year, and sold off 20% after releasing earnings.
So what happened?
For reference, $UNH saw a multitude of bad news in 2024 and 2025:
However, top lines continued to grow at healthy double digit rates.
But they saw even more bad news right before they released earnings on Tuesday.
Medicare Advantage reimbursement rates for 2027 are essentially flat.
• Expected increase: 0.09%
• Wall Street expected: 4–6%
Why this matters for UNH:
CMS (Centers for Medicare & Medicaid Services) determines how much insurers get paid per Medicare Advantage member.
Lower reimbursement =
• Slower revenue growth
• Higher margin pressure
So UNH went into earnings already on the defensive.
The biggest red flag from the earnings report though was the Medical Care Ratio (MCR).
• 2024: 85.5%
• 2025: 88.9%
Translation:
For every $100 UNH collects in premiums, it now spends $88.90 on medical costs, up around $3.40 year over year.
At UNH’s scale, that’s billions in lost margin.
In the call, management blamed three things:
1. CMS funding reductions
2. Inflation Reduction Act changes
3. Accelerating medical cost trends
But 2026 guidance is where many investors really decided to dump $UNH:
• Revenue expected = $439B (2% decline from 2025)
• MCR still elevated (~88.8%)
However, this sell off has certainly led to the stock trading at an interesting valuation.
As of right now, using a reverse DCF model, we can see the market is only pricing in 4.93% free cash flow growth annually over the next decade.
Historically they've grown FCF in the 15% range over the last decade.
There are certainly serious headwinds in the short term, but low expectations are clearly priced in, creating opportunity.
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