1. UNH stock dropped 58% from $600 to $260 in four months. 2. Medical cost ratio rose to 89.4%, indicating rising claims and declining margins. 3. Adjusted earnings per share forecast was cut from $30 to $16 for 2025. 4. Operating margin decreased from 8.8% to 7.3% in the past twelve months. 5. Recovery may not occur until 2026, increasing risks for investors.
The drastic earnings guidance reduction and margin compression signal severe operational issues, reminiscent of previous downturns in health insurers like CVS Health.
The article presents fundamental risks associated with UNH that could lead to continued stock price decline, making it highly relevant for investors.
Management's operational restructuring and cost containment may take considerable time, delaying any recovery.