We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is UnitedHealth (UNH) Up 14.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for UnitedHealth Group (UNH - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is UnitedHealth due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for UnitedHealth Group Incorporated before we dive into how investors and analysts have reacted as of late.
UnitedHealth Q2 Earnings Miss Estimates on Increasing Medical Costs
UnitedHealth Group reported second-quarter 2025 adjusted earnings per share (EPS) of $4.08, which missed the Zacks Consensus Estimate of $4.84. The bottom line declined 40% year over year.
Revenues rose 12.9% year over year to $111.6 billion. The top line marginally beat the consensus mark by 0.1%.
The weak quarterly earnings took a hit from elevated medical costs, partly offset by domestic commercial membership growth and strength witnessed in Optum Rx.
Business Performance of UNH
UnitedHealth’s second-quarter premium of $87.9 billion increased from $76.9 billion a year ago and also beat the consensus mark by 0.8%.
UNH’s medical care ratio (MCR) was 89.4% in the second quarter, which deteriorated 430 bps from the year-ago period. The metric was higher than the Zacks Consensus Estimate of 88.6% and our estimate of 87%. MCR witnessed an increase due to the previously noted reductions in Medicare funding and medical cost trend, which exceeded the pricing trend. Medical costs of $78.6 billion rose from $65.5 billion a year ago.
Second-quarter total operating costs of $106.5 billion escalated 17% year over year due to higher medical costs and the cost of products sold. The figure came higher than our model estimate of $103.8 billion. The second-quarter 2025 operating cost ratio improved to 12.3% from 13.3% in 2024 due to increased technological and other operating efficiencies and Part D programs.
UnitedHealth’s operating earnings declined 34.6% year over year to $5.2 billion in the second quarter. The net margin deteriorated 120 bps to 3.1% from the year-ago period.
Performance of UNH’s Business Platforms
Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, advanced 17% year over year to $86.1 billion in the second quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $84.8 billion.
Earnings from operations amounted to $2.1 billion, down from $4 billion a year ago. The operating margin decreased 300 bps year over year to 2.4%.
Revenues in the Optum business line were $67.2 billion, which rose 6.8% year over year due to strong contributions from Optum Rx. However, the figure fell short of the consensus mark of $67.5 billion.
Optum’s earnings from operations declined to $3.1 billion from $3.9 billion a year ago. The operating margin of 4.6% decreased 160 bps year over year.
UnitedHealth’s Medical Membership
The UnitedHealthcare business catered to 50.1 million people as of June 30, 2025, which grew 2.1% year over year due to its self-funded commercial benefits. However, the figure missed the Zacks Consensus Estimate of 50.3 million and also missed our estimate of 50.2 million.
UNH’s Financial Position (As of June 30, 2025)
UnitedHealth exited the second quarter with cash and short-term investments of $32 billion, which rose from the 2024-end level of $29.1 billion.
Total assets of $308.6 billion increased from the $298.3 billion figure at 2024-end.
Long-term debt, less of current maturities, amounted to $73.5 billion, up from the $72.4 billion figure as of Dec. 31, 2024. Short-term borrowings and the current portion of long-term debt were $5.7 billion.
Total equity of $100.5 billion advanced from the 2024-end level of $98.3 billion.
UnitedHealth generated operating cash flows of $7.2 billion in the second quarter, which surged from the prior-year figure of $2.2 billion.
UNH Capital Deployment Update
UnitedHealth rewarded $4.5 billion to its shareholders in the form of share repurchases and dividends in the second quarter. In June, the company hiked the quarterly dividend rate by 5%.
UNH’s 2025 Outlook
Management now projects adjusted net EPS to be at least $16 for 2025, down from the previous guided range of $26-$26.50 compared with the 2024 figure of $27.66. Net earnings are now expected to be at least $14.6 billion, up from the 2024 level of $14.4 billion.
Revenues are now projected between $445.5 billion and $448 billion in 2025, up from $400.3 billion in 2024. Operating cash flows are now projected to be $16 billion, down from $24.2 billion in 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -41.69% due to these changes.
VGM Scores
At this time, UnitedHealth has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise UnitedHealth has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
UnitedHealth is part of the Zacks Medical - HMOs industry. Over the past month, Centene (CNC - Free Report) , a stock from the same industry, has gained 11.8%. The company reported its results for the quarter ended June 2025 more than a month ago.
Centene reported revenues of $48.74 billion in the last reported quarter, representing a year-over-year change of +22.4%. EPS of -$0.16 for the same period compares with $2.42 a year ago.
For the current quarter, Centene is expected to post a loss of $0.18 per share, indicating a change of -111.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -159.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Centene. Also, the stock has a VGM Score of A.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is UnitedHealth (UNH) Up 14.2% Since Last Earnings Report?
A month has gone by since the last earnings report for UnitedHealth Group (UNH - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is UnitedHealth due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for UnitedHealth Group Incorporated before we dive into how investors and analysts have reacted as of late.
UnitedHealth Q2 Earnings Miss Estimates on Increasing Medical Costs
UnitedHealth Group reported second-quarter 2025 adjusted earnings per share (EPS) of $4.08, which missed the Zacks Consensus Estimate of $4.84. The bottom line declined 40% year over year.
Revenues rose 12.9% year over year to $111.6 billion. The top line marginally beat the consensus mark by 0.1%.
The weak quarterly earnings took a hit from elevated medical costs, partly offset by domestic commercial membership growth and strength witnessed in Optum Rx.
Business Performance of UNH
UnitedHealth’s second-quarter premium of $87.9 billion increased from $76.9 billion a year ago and also beat the consensus mark by 0.8%.
UNH’s medical care ratio (MCR) was 89.4% in the second quarter, which deteriorated 430 bps from the year-ago period. The metric was higher than the Zacks Consensus Estimate of 88.6% and our estimate of 87%. MCR witnessed an increase due to the previously noted reductions in Medicare funding and medical cost trend, which exceeded the pricing trend. Medical costs of $78.6 billion rose from $65.5 billion a year ago.
Second-quarter total operating costs of $106.5 billion escalated 17% year over year due to higher medical costs and the cost of products sold. The figure came higher than our model estimate of $103.8 billion. The second-quarter 2025 operating cost ratio improved to 12.3% from 13.3% in 2024 due to increased technological and other operating efficiencies and Part D programs.
UnitedHealth’s operating earnings declined 34.6% year over year to $5.2 billion in the second quarter. The net margin deteriorated 120 bps to 3.1% from the year-ago period.
Performance of UNH’s Business Platforms
Revenues of the health benefits business of UnitedHealth, UnitedHealthcare, advanced 17% year over year to $86.1 billion in the second quarter due to an increase in domestic commercial membership growth. The metric beat the Zacks Consensus Estimate of $84.8 billion.
Earnings from operations amounted to $2.1 billion, down from $4 billion a year ago. The operating margin decreased 300 bps year over year to 2.4%.
Revenues in the Optum business line were $67.2 billion, which rose 6.8% year over year due to strong contributions from Optum Rx. However, the figure fell short of the consensus mark of $67.5 billion.
Optum’s earnings from operations declined to $3.1 billion from $3.9 billion a year ago. The operating margin of 4.6% decreased 160 bps year over year.
UnitedHealth’s Medical Membership
The UnitedHealthcare business catered to 50.1 million people as of June 30, 2025, which grew 2.1% year over year due to its self-funded commercial benefits. However, the figure missed the Zacks Consensus Estimate of 50.3 million and also missed our estimate of 50.2 million.
UNH’s Financial Position (As of June 30, 2025)
UnitedHealth exited the second quarter with cash and short-term investments of $32 billion, which rose from the 2024-end level of $29.1 billion.
Total assets of $308.6 billion increased from the $298.3 billion figure at 2024-end.
Long-term debt, less of current maturities, amounted to $73.5 billion, up from the $72.4 billion figure as of Dec. 31, 2024. Short-term borrowings and the current portion of long-term debt were $5.7 billion.
Total equity of $100.5 billion advanced from the 2024-end level of $98.3 billion.
UnitedHealth generated operating cash flows of $7.2 billion in the second quarter, which surged from the prior-year figure of $2.2 billion.
UNH Capital Deployment Update
UnitedHealth rewarded $4.5 billion to its shareholders in the form of share repurchases and dividends in the second quarter. In June, the company hiked the quarterly dividend rate by 5%.
UNH’s 2025 Outlook
Management now projects adjusted net EPS to be at least $16 for 2025, down from the previous guided range of $26-$26.50 compared with the 2024 figure of $27.66. Net earnings are now expected to be at least $14.6 billion, up from the 2024 level of $14.4 billion.
Revenues are now projected between $445.5 billion and $448 billion in 2025, up from $400.3 billion in 2024. Operating cash flows are now projected to be $16 billion, down from $24.2 billion in 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -41.69% due to these changes.
VGM Scores
At this time, UnitedHealth has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise UnitedHealth has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
UnitedHealth is part of the Zacks Medical - HMOs industry. Over the past month, Centene (CNC - Free Report) , a stock from the same industry, has gained 11.8%. The company reported its results for the quarter ended June 2025 more than a month ago.
Centene reported revenues of $48.74 billion in the last reported quarter, representing a year-over-year change of +22.4%. EPS of -$0.16 for the same period compares with $2.42 a year ago.
For the current quarter, Centene is expected to post a loss of $0.18 per share, indicating a change of -111.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -159.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Centene. Also, the stock has a VGM Score of A.