UnitedHealth (UNH) stock has been under massive pressure lately—down over 21% in the past five days and nearly 38% year to date. After featuring it as one of two quality, undervalued stocks recently, I’ve received countless questions:
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Did I sell?
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Did I buy more?
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What’s my updated thesis?
Here’s my final update on UNH before the next earnings report. Let’s break down what’s happened, where I stand, and what I’m watching next.
UnitedHealth Group: What a Mess… or a Massive Opportunity?
UnitedHealth Group (UNH) has been in freefall—down nearly 50% in just four weeks. It’s one of the most dramatic collapses of a large-cap stock in recent memory.
First, there was a cyberattack. Then, the CEO was tragically killed. Next, they missed guidance. And now, the new CEO has said, “I’m out.”
Investors are panicking. The narrative feels like, “The whole building is on fire.”
But here’s the real question: Is this the beginning of the end, or is this a rare chance to buy a great business at a fire-sale price?
From Billion-Dollar Joke to Serious Questions
Yes, technically, UnitedHealth could “make you a millionaire”—if you started with $1 billion. It’s a sarcastic take on just how far the stock has fallen, and how sentiment has completely flipped.
But I believe sentiment is wrong. UNH is not the next Walgreens. I think it’s more likely the next Meta.
Remember Meta? It was crushed by the market—down 77% at one point—only to stage a massive rebound, trading at $650+ today. Why? Because the market misunderstood temporary headwinds as permanent damage.
The Shakeup: CEO Resigns, Guidance Suspended
The selloff accelerated when CEO Andrew Witty abruptly stepped down, and the company suspended its annual forecast—never a good look.
But Witty’s replacement, Stefan Hemsley, is a familiar face. He led UNH from 2006 to 2017, and under his leadership, the company performed extremely well.
More importantly: he has serious skin in the game.
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Witty held 78,000 shares (~$24M)
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Hemsley holds over 1 million shares (~$314M)
That’s not just symbolic ownership. That’s a CEO who’s deeply financially tied to UNH’s success. As Charlie Munger famously said:
“Show me the incentives, and I’ll show you the outcome.”
What’s Actually Wrong With UNH?
UNH’s problems are not mysterious:
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Medical costs for new Medicare Advantage enrollees are running hotter than expected.
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These pressures were flagged last quarter—and have now pushed the company to suspend guidance.
But UNH isn’t sitting still.
On a recent call, leadership made it clear they are:
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Repricing 2026 Medicare Advantage bids to reflect these higher costs.
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Adjusting pricing across markets to protect their long-term margin targets.
In short: they’re raising prices. And given that UNH already offers one of the cheapest, most comprehensive plans, they have pricing power to do this without losing competitiveness.
This is the kind of action I wanted to see. The new CEO isn’t just “assessing the situation”—he’s acting on it.
Let’s Start With the Bad News
Yes, the headlines are wild. But the selloff really began after the company reported Q1 2025 earnings on April 17.
The numbers disappointed.
The company said:
“UnitedHealth Group grew to serve more people more comprehensively, but did not perform to our expectations. We are aggressively addressing those challenges to position us well for the years ahead and return to our long-term earnings growth rate target of 13–16%.”
Sounds like corporate speak, but here’s what spooked investors:
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“Did not perform” = Bad.
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“Aggressively addressing challenges” = There are challenges.
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“Position us well for the years ahead” = Uncertainty now.
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“Return to long-term growth” = Growth is currently off track.
Then, the real bombshell dropped: CEO Andrew Witty stepped down, and the company suspended its annual forecast.
The stock fell 20% in a single day—erasing nearly $70 billion in market value.
Sure, the official reason for Witty’s exit was “personal reasons,” and maybe he really does want to spend more time with his family. But the optics weren’t great.
When CEOs are murdered, successors resign, and guidance disappears, investors run for the exits.
And that’s exactly what they’re doing.
But Here’s the Good News
Despite all the chaos, UnitedHealth remains a cash machine.
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$400 billion in annual revenue
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$20+ billion in free cash flow per year
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Minimal capital expenditures (it’s an insurance business, not a factory)
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A current market cap of ~$282 billion → That’s just 10x free cash flow.
In other words, this is a high-quality, dominant business trading at bargain-bin multiples.
UNH has a long history of:
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Buying back shares
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Paying dividends
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Paying down debt
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Growing earnings and cash flows consistently over time
Just look at the long-term chart—it’s not a fluke. This company has delivered.
The only reason the current dip feels so painful is if:
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You already own the stock and are watching it bleed
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Or you believe the entire business model is broken for the next 5–10 years
Let’s Talk About the Insurance Model
Health insurers like UnitedHealth collect premiums upfront and pay claims later. That creates a float—money they can invest in the meantime. It’s a business Buffett loves. And it’s not going anywhere.
Why do people buy health insurance? Because healthcare in the U.S. is insanely expensive, and most people:
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Live paycheck to paycheck
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Are one medical bill away from bankruptcy
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And let’s be honest… aren’t getting any healthier
This isn’t car insurance where you might go years without needing it. This is everyday life.
So the question is not whether the industry survives. It’s whether UnitedHealth maintains leadership and pricing power.
Given its size, profitability, and history—I believe it does.
So, Should You Buy the Stock Now?
If you’re a trader or someone with a 3-minute attention span, this stock probably isn’t for you.
But if you’re an investor with a 5 to 10-year horizon, the current selloff may represent a rare opportunity.
Yes, there’s short-term pain. Yes, the company has to prove it can rebound. But the core business is intact—and now it’s significantly cheaper.
If UnitedHealth can maintain even modest growth from here, today's valuation could be a gift in hindsight.
Why I Haven’t Bought the Dip
This may surprise some of you: I haven’t been buying more UNH yet.
Why?
Because I don’t DCA (dollar-cost average) based on price drops. I DCA based on fundamentals.
If the business outlook hasn't materially improved, I don't blindly average down just to lower my cost basis. That’s a mistake many investors make—selling winners to buy underperformers.
As Peter Lynch said:
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”
That’s not my style.
What Needs to Happen Before I Add More
I may nibble a small amount of shares soon, but I won’t meaningfully add to UNH before:
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The Q2 earnings report
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Evidence that the fundamentals are improving
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Confirmation that this new leadership is translating talk into results
If that means buying UNH at $400 instead of $300, I’m fine with that—if I’m buying into an uptrend supported by improved fundamentals. I’d rather average up into strength than blindly double down into a broken thesis.
Conclusion
I’m not saying it’s a guaranteed win. But I’d much rather buy a great company during bad times than a bad company during good times. That’s how wealth is built. Investing isn’t about being perfect. It’s about playing the odds with discipline. UNH could go lower—but if the company executes, the stock’s current valuation of just 11.5x forward earnings (similar to 2020 COVID lows) could be a long-term opportunity.
I’ll be watching closely heading into Q2. If things improve, I’ll gladly add. If not, I’ll reassess.
Until then, I’m holding steady—with clear eyes and zero emotion.
Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.
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