UNHUNH
US • HEALTHCARE
$415.63
P/E
31.39
PEG
44.84
FCF Yield
5.1%
Rev Growth YoY
+2.0% YoY
Gross Margin
18.8%
Health Score
8/10
D/E Ratio
0.83
Confidence
MEDIUM
Business Snapshot
UnitedHealth Group operates as a diversified healthcare company, primarily generating revenue through its health benefits segment (UnitedHealthcare) and its health services platform (Optum). The company serves a wide range of customers, including employers, individuals, and government programs like Medicare and Medicaid. UnitedHealth is the largest health insurer in the United States by market share and revenue, holding a dominant competitive position. As a large-cap company with a market capitalisation of $388.59B, it reported $449.71B in trailing twelve-month (TTM) revenue, underscoring its immense financial scale. The company's defining characteristic is its vertically integrated model, combining insurance risk management with data and pharmacy benefit management through Optum, which creates a significant competitive moat.
Financial Health
UnitedHealth's profitability is moderate, with a gross margin of 18.8% and a net margin of 2.7%, typical for the low-margin health insurance industry. The balance sheet is healthy, with a conservative debt-to-equity ratio of 0.83x, indicating a manageable level of leverage, though a current ratio of 0.89x suggests limited short-term liquidity coverage...
Risk Assessment
- VALUATION — P/E ratio of 31.39x is elevated compared to the sector average of 22x, suggesting the stock is priced for perfection.
- EARNINGS QUALITY — Only 2 out of the last 4 quarters beat earnings estimates, which is a neutral result but indicates average guidance predictability.
- DEBT / LIQUIDITY — Current ratio of 0.89x is below 1.0x, implying potential short-term liquidity constraints.
- 52-WEEK POSITION — The current price of $415.63 is near the top of its 52-week range (high: $427.93, low: $228.48) but slightly below the high.
- REVENUE DECELERATION — Revenue growth YoY is 2.0%, which is a deceleration from prior periods and points to a maturing business....
UnitedHealth's profitability is moderate, with a gross margin of 18.8% and a net margin of 2.7%, typical for the low-margin health insurance industry. The balance sheet is healthy, with a conservative debt-to-equity ratio of 0.83x, indicating a manageable level of leverage, though a current ratio of 0.89x suggests limited short-term liquidity coverage. The company generates substantial free cash flow of $19.69B, resulting in an attractive free cash flow yield of 5.1%, confirming strong cash generation capabilities. Overall, UnitedHealth is in solid financial health, with robust cash flows supporting a strong capacity for reinvestment, dividend payments, and share buybacks.
- VALUATION — P/E ratio of 31.39x is elevated compared to the sector average of 22x, suggesting the stock is priced for perfection. - EARNINGS QUALITY — Only 2 out of the last 4 quarters beat earnings estimates, which is a neutral result but indicates average guidance predictability. - DEBT / LIQUIDITY — Current ratio of 0.89x is below 1.0x, implying potential short-term liquidity constraints. - 52-WEEK POSITION — The current price of $415.63 is near the top of its 52-week range (high: $427.93, low: $228.48) but slightly below the high. - REVENUE DECELERATION — Revenue growth YoY is 2.0%, which is a deceleration from prior periods and points to a maturing business.
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