UNH's troubles are piling up, from a fresh DOJ criminal probe and rising costs to leadership shakeups and pulled guidance.
Health insurance companies have been in the limelight lately after UnitedHealthcare suspended its guidance for the full year citing higher medical costs. This comes during a challenging time when the CEO Andrew Witty also stepped down for ‘personal reasons.
Shares of UnitedHealth Group plunged more than 18% following a report that the Department of Justice is carrying out a criminal investigation into the health-care giant over possible Medicare fraud. The DOJ is reportedly focusing on the company's Medicare Advantage business practices, but the exact nature of the potential criminal allegations is unclear.
Shares of UnitedHealth Group tumbled more than 15% in morning trade on Thursday after a report said that the Justice Department is investigating the health insurer for potential fraud.
UnitedHealth Group stock has plummeted since my last Buy rating and is ~55% off highs, but its lower valuation now offers a significant margin of safety, making it a Buy. Disappointing Q1-2025 results and unexpected CEO changes have hurt the stock, but Stephen Hemsley's return as CEO should bring stability and experience. A DOJ probe against UnitedHealth adds to the risks and downside potential. However, I'm willing to take this risk at a "derisked" valuation.
UnitedHealth faces severe headwinds: CEO change, regulatory probes, cost overruns, and suspended guidance have driven a dramatic valuation reset. Despite the turmoil, UNH now trades at a deep discount to healthcare peers, with risks largely priced after falling more than 50% from 2024 highs. The company's long-term prospects hinge on management's ability to address utilization and pricing challenges without sacrificing market share.
Once a stalwart of healthcare investing, UnitedHealth Group (NYSE: UNH) has recently experienced a significant downturn. Its rapid stock price decline has led many investors to now view it as a "falling knife," a term for an asset in sharp decline that carries the risk of further losses for those who try to buy it.
Shares of UnitedHealth Group (UNH) slumped 6% in premarket trading Thursday on a report that the U.S. Department of Justice is investigating the embattled health insurance provider for possible criminal Medicare fraud.
The Justice Department is investigating UnitedHealth Group for possible Medicare fraud, a report says.
Shares of Persistent Systems declined 3% on Thursday, the most among Indian IT services providers, after a media report said that key client UnitedHealth Group was under a criminal probe for possible Medicare fraud.
These stocks have declined significantly in the past year and are now below their intrinsic values.
John Ransom, Raymond James director of healthcare research, joins 'Power Lunch' to discuss why Ransom has pause on shares of UnitedHealth, why the company withdrew its guidance, and much more.