Health insurance company UnitedHealth (NYSE: UNH) announced better-than-expected revenue in Q2 CY2026, but sales were flat year on year at $112 billion. Its non-GAAP profit of $6.38 per share was 30.6% above analysts’ consensus estimates.

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Company Overview

With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, UnitedHealth grew its sales at a decent 10.6% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. UnitedHealth’s annualized revenue growth of 8.1% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, UnitedHealth’s $112 billion of revenue was flat year on year but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

UnitedHealth was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 7.6% was weak for a healthcare business.

Analyzing the trend in its profitability, UnitedHealth’s adjusted operating margin decreased by 2.8 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 3.2 percentage points. We still like UnitedHealth but would like to see some improvement in the future.

This quarter, UnitedHealth generated an adjusted operating margin profit margin of 7.1%, up 2.5 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

UnitedHealth’s EPS grew at an unimpressive 3.1% compounded annual growth rate over the last five years, lower than its 10.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into UnitedHealth’s earnings to better understand the drivers of its performance. As we mentioned earlier, UnitedHealth’s adjusted operating margin expanded this quarter but declined by 2.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, UnitedHealth reported adjusted EPS of $6.38, up from $4.08 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects UnitedHealth’s full-year EPS to grow 5.7% from $18.64 to $19.71.

Key Takeaways from UnitedHealth’s Q2 Results

It was good to see UnitedHealth beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 6.9% to $447.41 immediately after reporting.

UnitedHealth had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).