Honestly, if you've been watching the stock price of UNH lately, you might think the sky is falling. It isn't. But it’s definitely been a rough ride for anyone holding UnitedHealth Group in their portfolio over the last year. We’re talking about a company that was once the "gold standard" of stability, now trading around $339, which is a massive haircut from its 52-week highs above $600. It’s wild to see a trillion-dollar-adjacent company lose that much value so quickly.
Most people look at the ticker and see red. They see a 34% drop in a year where the S&P 500 was actually doing okay. But if you're trying to figure out if this is a "buy the dip" moment or a "run for the hills" situation, you have to look at the mess happening behind the scenes. Between the Department of Justice looking into their billing and a Senate committee pointing fingers at how they use AI for Medicare Advantage, it’s basically a soap opera for accountants.
Why the Stock Price of UNH Is Getting Hammered Right Now
The big elephant in the room is the Medical Care Ratio (MCR). For the uninitiated, this is basically the percentage of premiums the company spends on actual medical care. Historically, UNH liked that number to stay around 82% to 85%. In 2025, that number spiked toward 90%. That 5% difference might sound small, but when you're dealing with hundreds of billions of dollars, it’s the difference between a private jet and a bus pass.
Why did it spike? A few things hit all at once:
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- Seniors finally started going back for those surgeries they delayed during the pandemic.
- Government funding for Medicaid and Medicare Advantage didn't keep up with inflation.
- The Change Healthcare cyberattack from 2024 left a lingering, expensive shadow on their balance sheet.
Investors hate uncertainty. When Stephen Hemsley took the CEO reins again last year after Andrew Witty’s exit, it was a signal that the company needed "adult supervision" to get back on track.
The Bull Case: Is the Turnaround Real?
Despite the carnage, most Wall Street analysts—about 78% of them—still have a "Buy" or "Strong Buy" rating on the stock. That’s kinda surprising given the price action, right? The average price target is floating around $404, which suggests there’s some serious upside if they can just stop the bleeding.
They’re already doing the one thing they know how to do: raising prices. In the insurance world, when costs go up, premiums go up next year. Hemsley mentioned in the Q3 2025 call that "repricing is on track." Basically, they’re passing the bill to employers and the government. It’s not great for your wallet, but it’s great for the stock price of UNH.
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Optum: The Secret Sauce or a Side Dish?
You can't talk about UnitedHealth without talking about Optum. It’s the pharmacy benefit manager (PBM) and clinic side of the business. Last year, Optum Rx was a rare bright spot, but Optum Health (the clinics) struggled because the patients they were seeing were just... sicker. They’re betting that 2026 will be the year these "value-based" care models actually start saving money instead of burning it.
What to Watch for on January 27
Mark your calendar. The Q4 2025 earnings call is happening on January 27, 2026. This is the big one. This is where management will lay out their "First Look" guidance for the rest of 2026. If they guide for earnings growth—even modest growth—the stock could rocket. If they’re vague or if the MCR is still hovering near 90%, expect more pain.
Honestly, the valuation is tempting. Trading at 18.8 times forward earnings is cheap for UNH. It usually trades closer to 25. But "cheap" can always get "cheaper" if the government decides to crack down on how they code Medicare diagnoses.
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The Regulatory Headache
The Senate Judiciary Committee isn't playing around. They’ve been looking into whether UNH used AI tools to "upcode" patients—essentially making them look sicker on paper to get higher government payouts. It’s a bad look. Even if it doesn't lead to a massive fine, it could lead to tighter rules that squeeze their profit margins for years.
Practical Steps for Investors
If you're looking at the stock price of UNH and wondering what to do with your cash, here’s the play:
- Watch the MCR, not the EPS. If that medical cost ratio doesn't start drifting back toward 86% or 87% in the next two quarters, the "recovery" is a myth.
- Check the Medicaid margins. The company lost about 300,000 members due to new work requirements in various states. If they can't stabilize the Medicaid business, Optum has to work twice as hard to fill the gap.
- Don't ignore the dividend. At a 2.6% yield, it's one of the few ways you get paid to wait. They’ve been consistent with raises, so the income floor is real.
- Wait for the Jan 27 call. There is no reason to jump in headfirst three weeks before the most important earnings report in five years. Let the management team prove they have a handle on the costs first.
The bottom line? UnitedHealth is a massive, complicated machine. It isn't going anywhere, but the days of easy, 20% annual gains are on pause while they fix the engine. If you've got a five-year horizon, this is likely a blip. If you're trading on margin, be careful—this stock has become way more volatile than your grandfather’s healthcare company used to be.
Focus on the guidance. If they reaffirm they can grow earnings in 2026, the market will likely forgive the 2025 disaster. Just don't expect a V-shaped recovery overnight. It’s going to be a slow, steady grind back to the $400s.
Next Steps: You should review the upcoming January 27 earnings transcript specifically for "Medical Care Ratio" trends and management's 2026 EPS guidance to see if it aligns with the $16.25 adjusted target.