⚠ The Year the Forecast FailedModerate threat

UnitedHealth Group (UNH) — threat to the moat

UnitedHealth began 2025 expecting about $29.75 a share and ended with $16.35, which is what happens when an insurer misjudges its costs by a year.

The clearest sign of how badly 2025 went is the path of the company's own forecast. In January 2025 UnitedHealth guided to adjusted earnings of $29.50 to $30.00 a share on revenue of $450 to $455 billion1. In April it cut the range to $26.00 to $26.502. In May it suspended guidance altogether as the chief executive stepped down3. In July it re-established a figure of at least $16.004, raised in October to at least $16.255.

2025 adjusted EPS, guidance and result ($)29.75Jan 2025 guide26.25Apr 2025 guide16.00Jul 2025 floor16.35ActualUnitedHealth results releases FY2024, Q1 2025, Q2 2025, FY2025; midpoints
The forecast fell by almost half.

Actual adjusted earnings were $16.35 a share6, about 45% below the original midpoint7. GAAP diluted earnings were $13.238.

A company that prices a year ahead depends on knowing its costs. The forecast failed because medical costs ran above what had been priced: the 10-K says the company observed care patterns above what it expected9.

The market's verdict was swift. UnitedHealth's market value fell from $465.54 billion at the end of 2024 to $299.03 billion at the end of 202510, a decline of about 36% in the year11. The final adjusted result, $16.35 a share, came in slightly above the re-established floor12.

The same thing could happen again. The 2026 guidance, now $19.50 to $20.00 adjusted13, is the test of whether the lesson was learned. A second mid-year cut would say the company still cannot see its own costs.

References
  1. ReportedIn January 2025 UnitedHealth guided to adjusted earnings of $29.50 to $30.00 a share on revenue of $450 to $455 billion.
    UnitedHealth Group fourth-quarter and full-year 2024 results release, Form 8-K exhibit 99.1 - the original 2025 outlook. — FY2024 · publ. 16 January 2025 · source ↗
  2. ReportedIn April it cut the range to $26.00 to $26.50.
    UnitedHealth Group first-quarter 2025 results release, Form 8-K exhibit 99.1 - the 2025 outlook cut. — Q1 2025 · publ. 17 April 2025 · source ↗
  3. ReportedIn May it suspended guidance altogether as the chief executive stepped down.
    UnitedHealth Group press release, Form 8-K exhibit 99.1: Andrew Witty steps down, Stephen Hemsley returns as chief executive, 2025 outlook suspended. — May 2025 · publ. 13 May 2025 · source ↗
  4. ReportedIn July it re-established a figure of at least $16.00, raised in October to at least $16.25.
    UnitedHealth Group second-quarter 2025 results release, Form 8-K exhibit 99.1 - the 2025 outlook re-established. — Q2 2025 · publ. 29 July 2025 · source ↗
  5. ReportedIn July it re-established a figure of at least $16.00, raised in October to at least $16.25.
    UnitedHealth Group third-quarter 2025 results release, Form 8-K exhibit 99.1. — Q3 2025 · publ. 28 October 2025 · source ↗
  6. ReportedActual adjusted earnings were $16.35 a share, about 45% below the original midpoint.
    UnitedHealth Group fourth-quarter and full-year 2025 results release and 2026 outlook, Form 8-K exhibit 99.1. — FY2025 · publ. 27 January 2026 · source ↗
  7. Moat Explorer calcActual adjusted earnings were $16.35 a share, about 45% below the original midpoint.
    Moat Explorer calculation from UnitedHealth Group's reported figures ($ millions unless stated). External revenue by segment = segment revenue less affiliated revenue (10-K segment notes): 2021 UnitedHealthcare 222,899; Optum Health 54,065 - 29,234 = 24,831; Optum Insight 12,199 - 7,867 = 4,332; Optum Rx 91,314 - 55,779 = 35,535; total 287,597. 2022: 249,741; 71,174 - 40,883 = 30,291; 14,581 - 9,288 = 5,293; 99,773 - 60,936 = 38,837; total 324,162. 2023: 281,360; 95,319 - 57,696 = 37,623; 18,932 - 10,896 = 8,036; 116,087 - 71,484 = 44,603; total 371,622. 2024: 298,208; 105,358 - 63,883 = 41,475; 18,757 - 11,881 = 6,876; 133,231 - 79,512 = 53,719; total 400,278. 2025: 344,903; 101,957 - 63,615 = 38,342; 19,417 - 12,948 = 6,469; 154,726 - 96,873 = 57,853; total 447,567. Q2 2026 (2026 basis): 86,017; 23,472 - 14,353 = 9,119; 5,402 - 3,556 = 1,846; 38,292 - 23,242 = 15,050; total 112,032; Optum external 9,119 + 1,846 + 15,050 = 26,015. Optum external revenue = Optum revenue less corporate eliminations: 155,565 - 90,867 = 64,698 (2021); 182,768 - 108,347 = 74,421 (2022); 226,635 - 136,373 = 90,262 (2023); 252,957 - 150,887 = 102,070 (2024); 270,620 - 167,956 = 102,664 (2025); 102,664 / 102,070 - 1 = 0.6%. Optum revenue from inside the group: 90,867 / 155,565 = 58.4%; 108,347 / 182,768 = 59.3%; 136,373 / 226,635 = 60.2%; 150,887 / 252,957 = 59.6%; 167,956 / 270,620 = 62.1%; Q2 2026 39,648 / 65,663 = 60.4%. Affiliated shares 2025: Optum Health 63,615 / 101,957 = 62%; Optum Insight 12,948 / 19,417 = 67%; Optum Rx 96,873 / 154,726 = 63%. Affiliated revenue as share of UnitedHealthcare revenue 167,956 / 344,903 = 49%. Segment shares of consolidated revenue 2025: UnitedHealthcare 344,903 / 447,567 = 77%; Optum Rx 57,853 / 447,567 = 12.9%; Optum Health 38,342 / 447,567 = 8.6%; Optum Insight 6,469 / 447,567 = 1.4%. Q2 2026 UnitedHealthcare 86,017 / 112,032 = 76.8%. Compound growth 2021-2025: UnitedHealthcare (344,903 / 222,899)^(1/4) - 1 = 11.5%; Optum Rx external (57,853 / 35,535)^(1/4) - 1 = 13.0%. Segment margins: UnitedHealthcare 11,975 / 222,899 = 5.4% (2021), 14,379 / 249,741 = 5.8% (2022); Optum Rx 4,135 / 91,314 = 4.5% (2021), 4,436 / 99,773 = 4.4% (2022); Optum Insight 3,398 / 12,199 = 27.9% (2021), 3,588 / 14,581 = 24.6% (2022); Optum Health H1 2026 2,331 / 47,581 = 4.9%. Optum earnings decline 16,703 - 9,539 = 7,164, 7,164 / 16,703 = 42.9%. Optum Health H1 2026 revenue 47,581 / 49,562 - 1 = -4.0%; earnings 2,331 / 1,840 - 1 = +26.7%; affiliated revenue Q2 14,353 / 15,845 - 1 = -9.4%. Optum Health 2025 recast margin -1,115 / 100,051 = -1.1%; 2024 6,902 / 103,516 = 6.7%. Medical care ratio 2015-2019 from EDGAR XBRL medical costs / premiums: 103,875 / 127,163 = 81.7%; 117,038 / 144,118 = 81.2%; 130,036 / 158,453 = 82.1%; 145,403 / 178,087 = 81.6%; 156,440 / 189,699 = 82.5%. Premiums 127,163 (2015) and 257,157 (2022). Operating earnings 11,021 (2015, XBRL). One point of medical care ratio on 2025 premiums: 352,229 x 1% = 3,522; 3,522 / 18,964 = 18.6% of operating earnings. Q2 2026 favorable development 860 / 86,956 premiums = 1.0 point. Membership: commercial risk-based 8,845 - 7,655 = 1,190 thousand, 1,190 / 8,845 = 13.5%; Medicare Advantage 8,445 - 7,565 = 880 thousand, 880 / 8,445 = 10.4%; Medicaid 7,845 - 6,780 = 1,065 thousand, 1,065 / 7,845 = 13.6%; Part D stand-alone (3,315 - 2,710) / 3,315 = 18.3%. Community & State revenue per year-end Medicaid member 75,004 / 7.845 = 9,561 dollars (2023); 94,390 / 7.380 = 12,790 dollars (2025). Optum Rx quarterly scripts (414 - 387) / 414 = 6.5%. Optum Insight backlog: external 32.8 - 12.5 = 20.3 bn (2024), 31.1 - 12.9 = 18.2 bn (2025), change -10.3%; affiliated share 12.5 / 32.8 = 38%, 12.9 / 31.1 = 41%. Cyberattack provider loans 9,033 - 4,514 - 1,680 = 2,839 not yet repaid at end-2025. Market value against peers: 108.78 + 86.37 + 70.16 + 45.67 + 30.59 + 10.07 = 351.64 bn; 338.03 / 351.64 = 96%. CMS premium revenue 44% x 447,567 = 196,929 (about 197 bn); all other 447,567 - 196,929 = 250,638. Medicare & Retirement share of UnitedHealthcare revenue Q2 2026: 42,390 / 86,017 = 49.3%. Premiums share of revenue Q2 2026: 86,956 / 112,032 = 77.6%. Capital returns 2025: dividends 7,916 + buybacks 5,545 = 13,461; 13,461 / 12,056 = 112% of net earnings; free cash flow 19,697 - 3,622 = 16,075; 13,461 / 16,075 = 84%. Goodwill 44,453 (2015, XBRL) and 110,499 (2025); goodwill plus other intangibles 110,499 + 20,474 = 130,973; 130,973 / 309,581 = 42.3% of assets. Long-term debt 25,331 (2015, XBRL). Interest expense / operating earnings: 3,246 / 32,358 = 10.0% (2023); 4,002 / 18,964 = 21.1% (2025). Rate sensitivity net 345 - 273 = 72. Investment income (3,920 - 5,202) / 5,202 = -24.6%; 4,089 / 371,622 = 1.1% of 2023 revenue. Net interest-bearing debt: 6,069 + 72,320 - 28,121 = 50,268 (Dec 2025); 3,827 + 69,501 - 31,468 = 41,860 (Jun 2026). 2025 guidance: original adjusted EPS midpoint (29.50 + 30.00) / 2 = 29.75; April (26.00 + 26.50) / 2 = 26.25; actual 16.35 / 29.75 - 1 = -45%. 2026 adjusted EPS midpoint (19.50 + 20.00) / 2 = 19.75. Progress vs 2026 guidance: operating earnings 16,981 / 25,450 = 66.7%. Q2 2026 operating earnings 7,991 / 5,150 - 1 = +55%. Gross segment revenue 2025: 344,903 + 101,957 + 19,417 + 154,726 = 621,003; less Optum eliminations 5,480 and corporate eliminations 167,956 = 447,567. Medical costs 313,995 / 264,185 - 1 = 18.9%; medical costs payable 39,337 / 34,224 - 1 = 14.9%. Commercial risk-based members 8,165 - 7,725 = 440 thousand (Q1 2026), 7,725 - 7,655 = 70 thousand (Q2 2026). Medicaid 7,380 - 6,780 = 600 thousand (six months to June 2026); 7,845 - 7,380 = 465 thousand (2023-2025). Optum Rx Q4 2025 share of year 2,885 / 7,193 = 40%. Goodwill 110,499 - 106,734 = 3,765. Total debt 6,069 + 72,320 = 78,389. Dividend at 9.28 x 897.6 million shares = 8,330, 8,330 / 16,750 = 50%. Year-end P/E 2015-2020: 19.3, 21.7, 20.2, 20.0, 20.1, 21.6 (market value / net earnings). H1 2026 medical care ratio 148,847 / 174,517 = 85.3%. Part D stand-alone 2,740 - 2,710 = 30 thousand (Q2 2026). Rounded external revenue ($bn): Optum Rx 35.5, 38.8, 44.6, 53.7, 57.9 (2021-2025), 15.1 (Q2 2026); Optum Health 24.8, 30.3, 37.6, 41.5, 38.3, 9.1 (Q2 2026); Optum Insight 4.3, 5.3, 8.0, 6.9, 6.5, 1.8 (Q2 2026); Optum 64.7, 74.4, 90.3, 102.1, 102.7; net debt 50.3 and 41.9; total debt 78.4; UnitedHealthcare revenue 222.9, 249.7, 281.4, 298.2, 344.9. Optum 2026 guidance 13,450 / 9,539 - 1 = +41%. Corporate eliminations Q2 39,648 / 41,712 - 1 = -4.9%. Net interest-bearing debt / total equity 50,268 / 100,090 = 0.50. Valuation: 2026 net margin implied by guidance 16,750 / 439,000 = 3.8%; 2023 net margin 6.0% x 439.0 bn = 26.3 bn; 338.03 / 26.34 = 12.8 times - ratios, growth rates and membership changes. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in UnitedHealth Group's Forms 10-K and 10-Q, results releases, SEC EDGAR XBRL and market data; operands shown in the source line.
  8. ReportedGAAP diluted earnings were $13.23.
    UnitedHealth Group Form 10-K for fiscal 2025 - financial statements and notes: segment note, CMS concentration, balance sheet, cash flow and capital. — FY2025 · publ. 2 March 2026 · source ↗
  9. ReportedThe forecast failed because medical costs ran above what had been priced: the 10-K says the company observed care patterns above what it expected.
    UnitedHealth Group Form 10-K for fiscal 2025 - Item 1A risk factors, competition, rate notices, reserve sensitivities and legal matters. — FY2025 · publ. 2 March 2026 · source ↗
  10. ReportedUnitedHealth's market value fell from $465.54 billion at the end of 2024 to $299.03 billion at the end of 2025, a decline of about 36% in the year.
    UnitedHealth Group market capitalisation history - year-end values 2015-2025 and related managed-care stocks. — 2015-2026 · publ. September 2026 · source ↗
  11. ReportedUnitedHealth's market value fell from $465.54 billion at the end of 2024 to $299.03 billion at the end of 2025, a decline of about 36% in the year.
    UnitedHealth Group market capitalisation history - year-end values 2015-2025 and related managed-care stocks. — 2015-2026 · publ. September 2026 · source ↗
  12. ReportedThe final adjusted result, $16.35 a share, came in slightly above the re-established floor.
    UnitedHealth Group fourth-quarter and full-year 2025 results release and 2026 outlook, Form 8-K exhibit 99.1. — FY2025 · publ. 27 January 2026 · source ↗
  13. ReportedThe 2026 guidance, now $19.50 to $20.00 adjusted, is the test of whether the lesson was learned.
    UnitedHealth Group second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, medical care ratio, cash flow, balance sheet and the raised 2026 outlook. — Q2 2026 · publ. 16 July 2026 · source ↗
Sources
Generated September 26, 2026