UnitedHealth Group Stock Soars 27% After Cyberattack Fallout and Senate Inquiry

If you are wrestling with the decision of what to do with UnitedHealth Group stock right now, you are far from alone. The past year has been a wild ride, complete with double-digit declines, a surprise turnaround in recent weeks, and a dramatic backdrop of regulatory and security headlines. The stock is down by more than 45% over the past year, and a staggering -36.5% year to date, but in the last 30 days, UnitedHealth has rallied an eye-opening 27.6%. That bounce is enough to grab anyone’s attention, especially if you saw your portfolio take a hit during the steady selloff.

It’s not just the price chart causing a stir. UnitedHealth has been making news for all the wrong reasons lately. A massive cyberattack impacted nearly 193 million people, and lawmakers are now zeroing in on the company’s emergency loans to health providers, asking tough questions about repayment. Meanwhile, a widening federal probe into UnitedHealth’s Optum Rx operation and how it reimburses doctors has led some investors to question whether there is more risk lurking under the surface. Yet, BofA’s recent commentary points out that the company’s new outlook may have marked a bottom for expectations.

So, where does value fit into all this? According to our scorecard, UnitedHealth is undervalued in 4 out of 6 key valuation checks, giving it a value score of 4. But with so many moving parts, how can you really know if the stock is a bargain or a value trap? In the next section, I will break down the valuation methods investors are using now, and later, I will share what I see as the most reliable way to cut through the noise.

Why UnitedHealth Group is lagging behind its peers

Approach 1: UnitedHealth Group Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a forward-looking valuation tool. It estimates the intrinsic value of a company by projecting its future free cash flows and discounting them back to the present using an appropriate rate. This approach helps investors determine what a business is truly worth, regardless of market fluctuations.

For UnitedHealth Group, the DCF analysis begins with a current Free Cash Flow (FCF) of $25.21 Billion. Analysts forecast that FCF will grow consistently over the next several years and reach an estimated $27.60 Billion by 2029. Projections beyond five years are extrapolated to provide a full ten-year outlook on the company's cash generation potential. This forward trajectory reflects both near-term estimates and longer-term trends as assessed by independent analysts and Simply Wall St.

According to this model, UnitedHealth's fair value per share is $867.30. When compared to the current price, this signals a substantial intrinsic discount of approximately 63.1%. By this yardstick, UnitedHealth appears considerably undervalued.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for UnitedHealth Group.

Our Discounted Cash Flow (DCF) analysis suggests UnitedHealth Group is undervalued by 63.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: UnitedHealth Group Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a widely used metric for valuing profitable companies like UnitedHealth Group because it directly relates a company’s share price to its earnings per share. For businesses that generate dependable profits year after year, the PE ratio helps investors gauge how much they are paying for each dollar of earnings, which can be a good indicator of value.

That said, what counts as a “normal” or “fair” PE ratio depends not only on earnings but also on investors' expectations for future growth and the risks tied to the business. Companies with higher growth prospects or lower risk profiles will often command higher PE multiples, while those facing uncertainty or limited growth may trade at lower ratios.

Currently, UnitedHealth Group trades at a PE ratio of 13.6x. This is slightly above its peer group average of 13.0x but well below the broader healthcare sector, which averages 21.4x. However, industry averages and peer multiples alone do not capture the full story.

This is where Simply Wall St’s proprietary "Fair Ratio" comes in. The Fair Ratio calculates what the PE should be given UnitedHealth’s unique combination of earnings growth, profit margins, industry dynamics, market capitalization, and risk profile. Unlike simple peer or industry comparisons, the Fair Ratio provides a more tailored benchmark that accounts for the company’s actual strengths and weaknesses.

For UnitedHealth, the Fair Ratio stands at 36.6x, which is significantly higher than its current 13.6x PE. This suggests that, based on its growth outlook and risk profile, the stock could be trading at a much higher multiple and still be considered fairly valued by this measure. The current gap points to the stock being undervalued by this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your UnitedHealth Group Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply the story behind a company’s numbers, reflecting your view of its future revenue, earnings, and margins. You can use this to map out your personal outlook and arrive at a fair value.

Narratives work by linking the company’s big picture, including new strategies, risks, and market shifts, directly to a dynamic financial forecast. This means every assumption you make gets translated into an up-to-date valuation. It makes it easier for investors of any level to connect their perspective to a fair value estimate, instead of relying solely on market multiples or past results.

On Simply Wall St’s Community page, you can access and build Narratives just like millions already do. Narratives help you compare your Fair Value to the current Price, and because they update automatically when news or earnings are released, your outlook adjusts as the story evolves.

For example, one UnitedHealth Group Narrative currently sees fair value at $626 by projecting robust earnings growth and margin resilience, while another takes a cautious stance with a $198 target, expecting sustained margin pressures. This shows there is more than one story even among the experts.

Do you think there's more to the story for UnitedHealth Group? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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