UnitedHealth stock price has imploded in the past few months, making it one of the worst-performing companies in the S&P 500 Index. It has plunged from the year-to-date high of $620 to a low of $247. Its market capitalization has plunged from a high of $575 billion to $295 billion.
Why UnitedHealth stock price has crashed
UnitedHealth has become an embattled company this year as its growth has slowed. The most recent results showed that UNH’s business continues to slow.
Its revenue came in at $109.6 billion, a $9.8 billion increase from the same period last year as its number of clients grew. This growth occurred as the company’s customer base increased by 780,000 from the same period a year earlier.
While this growth was good, the stock plunged after the company lowered its forward guidance.
The company’s revised guidance is that its earnings per share (EPS) to $24.65 to $25.15, while its adjusted EPS will be between $26 to $26.50. Wall Street analysts anticipate its EPS will be $22.15 this year, much lower than last year’s $27.66. Its EPS in 2026 will be about $26.
The main reason for this slowdown is the challenges with its Medicare Advantage (MA) service, which it leads today. MA is a service offered by private companies that is approved by Medicare. It is an alternative to the original Medicare service that bundles hospital insurance, medicare insurance, and prescription drugs.
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Its challenge started during the Biden administration, which changed what the business can charge. This happened as the medicare costs were soaring, which has continued to reduce its margins.
UnitedHealth stock price has crashed because of the problems at Optum, its technology-enabled health services. Optum operates Optum Health, OptumRx, and OptumInsight. When healthcare costs rise, UNH is hit hard as an insurer since it pays higher costs.
Compounding the problems at UnitedHealth, the company’s Change Healthcare service went through a major hack that exposed data on over 190 million customers. Over six terabytes of sensitive data was stolen.
Therefore, analysts and investors are pegging their hopes on Stephen Hemsley, the new CEO who expects to business to return to its historical growth trajectory of between 13% and 16%.
Analysts have a mixed opinion on the UNH stock price. Baird analysts downgraded their rating from outperform to neutral. On the positive side, those at UBS have a buy rating, while JPMorgan, Piper Sandler, and Barclays have an overweight rating.
UNH stock price technical analysis
The weekly chart shows that the UnitedHealth share price has crashed in the past few months. It has recently formed a death cross pattern as the 50-week and 200-week Exponential Moving Averages (EMA) have crossed each other. A death cross is one of the most bearish patterns.
The UnitedHealth stock price has formed a bearish flag pattern, a highly popular continuation sign. It also moved below the lower side of the rising channel pattern
Therefore, the stock will likely continue falling as sellers target the key support level at $246, the lowest level this week.
Read more: Insiders are buying UnitedHealth stock on the crash: should you follow suit?
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