$UNH just guided 2026 revenue to $439 billion. Down from $448 billion in 2025. That's a 2% decline — and the first time UnitedHealth has guided for lower annual revenue in decades.
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The stock is hovering around $339, down sharply from its 2024 peaks. Mizuho slashed its price target from $430 to $350. The largest healthcare company on Earth is suddenly the one nobody wants to own.
Q4 Was the Warning Shot
Q4 2025 revenue came in at $113.2 billion, missing the $113.7 billion consensus. Not a disaster on its own. But net income collapsed to $10 million — one cent per share — compared to $5.54 billion ($5.98/share) a year earlier. That's a 99.8% drop in quarterly profit.
Adjusted EPS was $2.11, down 65% year-over-year. The full-year medical care ratio hit 89.1%, but the Q4 quarterly figure was even worse at 92.4% — meaning for every dollar of premiums collected, 92 cents went straight to medical costs. That's not a business. That's a pass-through.
Full-year 2025 revenue was $448 billion, up 12% from 2024, with domestic membership growing by 415,000 people. The top line grew. Everything underneath it didn't.
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The Medicare Advantage Problem
The real story is CMS. The agency proposed a nearly flat 0.09% Medicare Advantage rate increase for 2027. Analysts expected 4-6%. That gap is enormous for a company whose insurance business depends on government reimbursement rates keeping pace with medical costs.
Medicare Advantage is UnitedHealth's bread and butter. When the government says "we're not paying more," the math breaks. Either you absorb the cost inflation (crushing margins) or you exit unprofitable markets (shrinking the business). UnitedHealth is staring at both options.
The 2026 guidance to $439 billion reflects this reality. Management isn't sandbagging. They're telling the market that the growth engine has stalled — at least temporarily — while they restructure around a less generous reimbursement environment.
The Overhang Nobody Forgets
There's also the DOJ investigation. The cyberattack on Change Healthcare in 2024. The CEO assassination that shook the entire industry. Each of these would be a headline story for any other company. For UnitedHealth, they stack up into a narrative of a healthcare giant losing its grip.
Restructuring charges, business divestitures, and breach-related costs all dragged Q4 net income to near zero. Strip those out and the business is still profitable. But the market prices risk, not adjustments.
What the Bears See
Revenue declining for the first time in memory. Medicare Advantage rates going nowhere. Medical costs rising faster than premiums. A DOJ probe that could result in regulatory action. A stock that traded above $600 and now sits at $339.
The bear case writes itself: UnitedHealth's era of effortless growth is over.
What the Bulls See
A $448 billion revenue company trading at roughly 13x forward earnings. Optum, the tech and services arm, continues to grow and now generates more revenue than the insurance side. The managed care business still covers 49.8 million people. And the CMS rate proposal is just that — a proposal. Final rates could be higher.
Mizuho kept its Outperform rating even while cutting the target to $350. The institutional read: the stock is cheap for the business quality, even if near-term growth is gone.
Bottom Line
UnitedHealth guided down for the first time in decades. That's not noise — it's a structural signal about where healthcare margins are heading under tighter government reimbursement.
At $339, the stock is pricing in real pain. Whether it's pricing in enough depends on how CMS finalizes 2027 rates and whether Optum can pick up the slack. If Medicare Advantage rates come in above the 0.09% proposal, $UNH rips. If they don't, this is a value trap hiding behind scale.
There's also the earnings math to reckon with. The 2026 guidance implies adjusted EPS above $17.75 — call it $4-5 per quarter. That's a far cry from the $6+ quarters UNH was printing in 2023 and early 2024. At $339, the stock trades at roughly 19x that guided EPS. Cheap for UNH historically, but only if you believe the recovery story.
The optimistic read: management is sandbagging. UNH has a long history of guiding conservatively and beating. The $439 billion revenue target and $17.75 EPS floor could be the starting point, not the ceiling. If CMS final rates come in above the proposed 0.09% and Optum's restructuring starts paying off by mid-year, the setup for upward revisions is real.
The pessimistic read: this time is different. The MCR isn't normalizing. The DOJ investigation creates regulatory overhang. And $4-5 in quarterly EPS from a company that used to do $6+ isn't sandbagging — it's the new baseline.
The biggest healthcare company in the world just told investors to expect less. The market is deciding if "less" is already in the price — or if there's more pain hiding in that 92.4% medical care ratio.
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