QS Research · Michael Burry's Scion Capital analyst template · 2006
UNITEDHEALTH GROUP INC (UNH)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -24% · upside +41%
At 22.2x TTM P/E on $15.88B net income, UNH is not priced as a deep-value insurer: it trades at a premium to ELV at 17.9x and CI at 13.0x while TTM earnings are still about 29% below the FY2023 peak. Holding today's 22.2x multiple, TTM earnings are worth about today's $394 price, FY2025 trough earnings are worth $298.80 (-24.2%), and FY2023 peak earnings are worth $554.49 (+40.7%), so the long rule is not met. The raised FY2026 guidance to at least $20.50 adjusted EPS and 14 upward estimate revisions are real catalysts, but $610M of Q3 2026 favorable prior-period reserve development and continuing member losses make the recovery unproven. I would watch, not buy, until either the price offers margin of safety or earnings recovery is confirmed.
Key numbers
- Share price: $394.15
- Market cap: $353.17B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $449.66B
- P/E (TTM): 22.2x
The 15 boxes
- ✓ 1. Long-form business notes
UNH's latest 10-K (dated 2026-03-02) describes two platforms, Optum and UnitedHealthcare, with four reportable segments; revenue comes from risk-based premiums, pharmacy product revenue and fees, and CMS premiums were 44% of FY2025 consolidated revenue. Optum Health addresses 95 million consumers, Optum Insight had $31.1B backlog at Dec 31, 2025, and Optum Rx managed $188B of pharmaceutical spend in 2025. S24 shows revenue rising from $257.14B FY2020 to $447.57B FY2025, but FY2025 operating income was $18.96B and net income $12.06B versus $32.29B and $14.40B in FY2024; the reports also show a Jan 1, 2026 Optum Financial realignment and no UnitedHealthcare Global in the latest segment description.
- ✓ 2. Competitive advantage
UNH has scale — revenue rose every year from $257.14B (FY2020) to $447.57B (FY2025) — and a nationally registered brand plus >390,000 employees, but the last three years show scale not converting into profit: operating income fell from $32.36B (FY2023) to $18.96B (FY2025) and net income from $22.38B to $12.06B on a base $76B larger. The 10-K describes competition from startups through Fortune 50 global enterprises, with rivalry on quality, innovation, technology and pricing rather than a protected franchise, and ~80% of revenue is risk-based premium where small medical-cost misses hit results directly. The durable advantages the filings actually evidence are brand/trademark ownership, breadth of clinical labor and purchasing scale; the filings equally evidence weak bargaining power against large hospital and physician groups and against consolidating competitors and suppliers.
- ✓ 3. 10-Q takeaways
Q3 2026 was a flat-revenue, higher-margin quarter: revenue $112.7B versus $113.2B a year ago as UnitedHealthcare served 1.8 million fewer people, but earnings from operations rose 52% to $6.6B on an MCR of 88.4% (from 89.9%) and an operating cost ratio of 12.8% (from 13.5%), helped by $610M of favorable prior-period reserve development and $224M of net portfolio-divestiture gains booked in operating costs. Nine-month operating cash flow was $25.1B versus $18.6B, capital return continued ($5.0B buybacks, $6.2B dividends), and the release raised FY2026 guidance to at least $19.50 GAAP / $20.50 adjusted EPS. The 10-Q reports no material change in risk factors; the computed 10-K diff shows 11 new or rewritten risk paragraphs, including AI.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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