WHAT THE HELL HAPPENED TO UNITEDHEALTH?
Today, I am diving into why UnitedHealth has been hit harder than any other S&P 500 company in 2025!
But of course, the real question for us is, Are we looking at an investment trap—or a massive opportunity?
Because if you take a look at what’s happened to UnitedHealth ... it’s straight out of a Netflix series. From cyberattacks and murders to fraud investigations and executive resignations, the company went through absolute hell. And all of this happened in just a few months.
And yet, this all happened to the biggest and most respected health insurer in the world. The result? Its stock plunged by -42% in 2025, making it the worst-performing stock in the S&P 500. So the big question is: Is this company done for—or is now the time to buy?
WHAT IS UNITEDHEALTH?
UnitedHealth operates under two main pillars
UnitedHealthcare, the traditional insurance arm. It provides health insurance packages to over 50 million Americans, covering both private clients and government programs like Medicare and Medicaid.
Optum, the tech-driven powerhouse. It offers health services, data analytics, pharmacy services, and support for doctors and patients alike.
Basically, this company does it all in the health space. It’s profitable, it keeps growing, and it serves a massive chunk of the population. Until recently, it was considered one of the most "bulletproof" stocks on the market.
WHAT HAPPENED
And then suddenly… all hell broke loose.
Seriously, what happened?
February 2024
Change Healthcare, a subsidiary of UnitedHealth , gets hit by a massive cyberattack. Chaos ensues, with sensitive data leaks and damages worth $3 billion. The company also spent another $3 billion to support healthcare providers affected by the breach.
December 2024
The CEO of UnitedHealthcare is murdered in cold blood in New York. The incident shocks both the public and Wall Street. The perpetrator blamed the company for exploiting patients.
Q1 2025 Earnings
Despite record revenues (over $109 billion in just one quarter), the stock tanks. Why? Because the company revised its EPS forecast for 2025 down from $30 to $26–$26.5. The reason? Fears over rising drug costs due to new Trump-era policies.
Executive Departures
The CEO steps down citing personal reasons. At the same time, the company pulls all forward guidance, spooking the market even more.
Fraud Investigation
The Wall Street Journal reveals that the U.S. Department of Justice is investigating UnitedHealth for fraud related to Medicare Advantage. The company denies being officially notified, but the damage is done.
FUNDAMENTALS
No matter what happens, in the end, what really matters is the numbers. And behind all the drama, the numbers are incredible:
Consistent revenue and EPS growth for over a decade
All business segments are growing at double-digit rates. The most impressive? Direct health services, with a +23% increase
Pays a growing dividend every year, fully covered by strong free cash flow
Currently trades at a P/E of 12, while its historical average is around 24 → suggesting it might be undervalued by 50%
WHAT IS MANAGEMENT DOING?
So the situation is clear. It might look like the company is spiraling—but in reality, the opposite might be true. And management seems to back this up.
Yeah, but what else are they supposed to say?
Well, when insiders start buying shares of their own company, that usually says a lot.
We’ve seen three Directors buy shares worth $500,000 each. And the new CEO went all-in—buying $25 million worth of shares!
And as the saying goes: There are many reasons an insider might sell, but only one reason to buy—they think the stock is too cheap.
FINAL THOUGHTS
UnitedHealth is having the worst year in its history. And yet, despite all the chaos, its fundamentals remain rock-solid. It’s the market leader in its sector, with strong cash flows, consistent revenue growth, and a stock that's currently trading at half its fair value.
Investing isn’t easy. There’s always uncertainty.
But that’s exactly where opportunities live. Personally, I’m watching this one very closely.
Posted Using INLEO