Key Points
-
UnitedHealth Group stock has lost close to half of its value in just the past 12 months.
-
Its medical care ratio was up to 89% last year — far higher than what it was five years ago.
- 10 stocks we like better than UnitedHealth Group ›
UnitedHealth (NYSE: UNH) is a leader in the health insurance industry, but its share price hasn’t been reflecting that of late. In just the past year, the stock has been nosediving, and it’s now down around 54% from its 52-week high of $606.36, with investors feeling bearish on its business of late. There’s been no shortage of bad news surrounding the stock, and there could still be plenty of challenges ahead for the business.
But what if you’re a long-term investor who’s willing to hang on amid its current headwinds? Could it be worth buying right now? Here’s what you need to know about the healthcare stock, and what kind of risk you might be taking with it if you invest in it today.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
UnitedHealth still isn’t out of the woods
While UnitedHealth’s stock has been on quite the tailspin over the past 12 months, that doesn’t necessarily mean it’s due for a rally. A troubled stock can always fall lower. The biggest concern may be what happens regarding ongoing investigations into its billing practices. The Department of Justice is looking into the company’s operations, and if drastic changes are needed or new restrictions are put in place, that could impact its growth prospects.
Another issue is that UnitedHealth’s costs remain high. Its medical care ratio (MCR), which tells investors how much of the premiums it collects it pays out for medical claims, was over 89% last year. Back in 2020, its MCR was just over 79%. Costs have swelled significantly due to higher utilization rates. The good news is that at this stage, investors and analysts may have already come to expect high MCRs, and thus, even a modest improvement in future quarters could be great news for the stock.
The stock is cheap, but is it a good investment option?
Buying a stock simply because it has come down in value significantly can be a risky approach. Remember, it’s down for a reason. And when it’s down as much as UnitedHealth stock is, there are likely very concerning reasons for its decline.
UnitedHealth’s drastic crash in value over the past year is indicative of that risk and uncertainty ahead. Even though its valuation may seem modest, with the stock trading at 21 times its trailing earnings, I wouldn’t venture out and buy it today. The company’s margins have been coming under pressure, and questions remain about its long-term growth amid greater potential scrutiny in the health insurance industry.
I’d keep an eye on the stock, but there isn’t an overwhelming reason to buy it right now.
Should you buy stock in UnitedHealth Group right now?
Before you buy stock in UnitedHealth Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $533,522!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,089,028!*
Now, it’s worth noting Stock Advisor’s total average return is 930% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 7, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
