UnitedHealth’s fourth quarter results were met with a significant negative market reaction, as management highlighted ongoing challenges in its Medicare Advantage and Medicaid businesses. CEO Stephen Hemsley described 2025 as a year of “critical self-examination,” emphasizing actions to rightsize membership, reprioritize margin over volume, and address operational inconsistencies—particularly within OptumHealth. Both Hemsley and UnitedHealthcare CEO Timothy Noel pointed to elevated medical cost trends and competitive pressures in Medicare Advantage as key drivers of membership losses and compressed operating margins. Management acknowledged that recent restructuring actions, including divesting non-core assets and workforce reductions, were necessary to establish a stronger foundation for future performance.
Is now the time to buy UNH? Find out in our full research report (it’s free for active Edge members).
UnitedHealth (UNH) Q4 CY2025 Highlights:
- Revenue: $113.2 billion vs analyst estimates of $113.6 billion (12.3% year-on-year growth, in line)
- Adjusted EPS: $2.11 vs analyst estimates of $2.11 (in line)
- Adjusted EBITDA: $4.25 billion vs analyst estimates of $4.41 billion (3.8% margin, 3.7% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $17.75 at the midpoint, in line with analyst estimates
- Operating Margin: 0.3%, down from 7.7% in the same quarter last year
- Customers: 53.69 million, down from 54.08 million in the previous quarter
- Market Capitalization: $258.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From UnitedHealth’s Q4 Earnings Call
- Joshua Raskin (Nephron Research) asked if Medicare Advantage margins would improve further in 2027 and how important this segment is to OptumHealth. CEO Stephen Hemsley and CEO Timothy Noel emphasized a margin-over-volume approach, with Noel noting, “our strategy in '26 did focus more on margin than on any specific membership target.”
- Justin Lake (Wolfe Research) questioned the volatility in OptumHealth’s fourth quarter and confidence in 2026 stability. OptumHealth President Krista Nelson cited restructuring actions and a more rigorous management approach, stating, “We have reoriented OptumHealth back towards our original purpose.”
- Kevin Fischbeck (Bank of America) inquired about the impact of CMS risk model changes and whether UnitedHealth could maintain target margins. Noel and Nelson responded that industry-wide impacts are expected and that high-performing markets already achieve target margins.
- Lisa Gill (JPMorgan) asked how changes in Part D and new client wins at OptumRx would affect 2026. CFO Wayne DeVeydt highlighted strong client retention and new wins, with affordability, transparency, and execution cited as key differentiators.
- Jessica Tassan (Piper Sandler) sought insights from the independent reviews of UNH practices and confidence in handling regulatory reforms. Hemsley and Nelson described the reviews as affirming strong governance and oversight, with a continued focus on transparency and risk management.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) the pace and impact of AI-driven cost reductions across UnitedHealth’s operations, (2) the degree to which margin expansion offsets expected membership declines in core insurance businesses, and (3) progress in portfolio realignment, particularly the integration of Optum Financial Services with OptumInsight. Additional attention will be paid to regulatory developments affecting Medicare and Medicaid funding, which could further shape the company’s strategic direction.
UnitedHealth currently trades at $286.22, down from $351.64 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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