Overview
UnitedHealth Group
UNH · NYSEQ3 2026Health Care · Health Insurance
Since the Report + 8.4%
Revenue fell 0.4% year over year, EPS beat the estimate by 13.3%; the stock fell 0.2% in its first reaction.
- RevenueQ3 2026
- $112.7B
- Expected $111.4B · 1.2% Above
- EPSAdjusted
- $4.69
- Expected $4.14 · Beat by 13.3%
Verdict
BUYUnitedHealth opened two gates and matched on one: adjusted EPS beat by 13.3% and the profit outlook sits 3.2% above expectations; score 73, buy. The stock opened 5% higher but closed down 0.2% after management gave no numbers for 2027. Next, watch the 2027 outlook due before year-end and the path of the medical care ratio.
Close on Report DayOct 13
$377.76▼ 0.2%Report-Day Move
- Market Cap(Today)
- ≈ $367 B
- 1Y Return(At Report)
- + 5%
- P/E(At Today's Price · $20.41 · Trailing 12M)
- 20.1
- PEG(Company Guidance 2026)
- 0.79
- Net Margin(Trailing 12M)
- 3.5%
Earnings Summary
In 30 Seconds- Adjusted EPS of $4.69 beat expectations by 13.3%, and revenue of $112.7B came in 1.2% above expectations.
- The full-year adjusted EPS outlook was raised to at least $20.50, 3.2% above the market expectation.
- The stock rose as much as 5.6% intraday but closed down 0.2% after management gave no 2027 numbers.
The Numbers
Medical Care Ratio
88.4%
1.5 Pt Better YoY · Q2 26: 86.7%
Full-Year Adjusted EPS Outlook
At Least $20.50
Expected $19.86 · 3.2% Above
Optum Health Operating Earnings
$735M
Q3 2025: $41M · Margin 3.2%
Stock Reaction
−0.2%
Close to Close · Intraday High +5.6%
Quarterly Revenue ($ Billion)
113
Q3 25 · $113 B
113
Q4 25 · $113 B · QoQ + 0.0%
112
Q1 26 · $112 B · QoQ − 1.3%
112
Q2 26 · $112 B · QoQ + 0.3%
113
Q3 26 · $113 B · QoQ + 0.6% · YoY − 0.4%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
Q4 2026 Company Guidance
- Full-Year Adjusted EPS20.5 $
At Least 20.50 · Prior Range 19.50–20.00 · Market Expectation 19.863.2% Above Expectations ▲
- Full-Year GAAP EPS19.5 $
At Least 19.50 · Prior Range 18.45–18.954.3% Above Prior Midpoint ▲
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±3.6% around the midpoint.
Segment and KPI Data
Revenue by Segment
- UnitedHealthcare (Health Insurance)$86.3 BShare 55.8%▼ 0.8% YoY
- Optum Rx (Pharmacy Services)$39.9 BShare 25.8%▲ 0.6% YoY
- Optum Health (Care Delivery)$22.9 BShare 14.8%▼ 9.9% YoY
- Optum Insight (Data and Technology)$5.47 BShare 3.5%▲ 2.9% YoY
Key Metrics
Medical Care Ratio
88.4%
Press Release
Operating Cost Ratio
12.8%
Press Release
Medicare Advantage Members
7.61 M people
▼ 9.8% YoYPress Release
UnitedHealthcare Medical Members
48.3 M people
▼ 3.6% YoYPress Release
Favorable Reserve Development
$610 M
Press Release
Share Buybacks (9 Months)
$5.03 B
▼ 9.3% YoYPress Release
Days Claims Payable
47 days
Press Release
Shares are computed over the segment total: $155 B. The segment total differs from consolidated revenue ($113 B); the company's eliminations and other lines are not in this table. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Our third quarter results reflect the discipline and execution our teams are bringing to every part of our business.”
- Margin Recovery Continues
- 2027 Update Before Year-end
- Optum Health Back to Profit
Summary and Review
Summary
UnitedHealth reported third-quarter revenue of $112.7B. The market expected $111.4B; the gap is 1.2%, so the revenue gate is in line. Adjusted earnings per share came in at $4.69, beating the $4.14 expectation by 13.3%; the EPS gate is open. The full-year adjusted EPS outlook was raised to at least $20.50. That is 3.2% above the $19.86 market expectation, so the guidance gate is open too. Two open gates and one in line put the quarter in the buy band; score 73.
The stock opened 5% higher at $397.63 and reached $399.88. The gain faded as the earnings call went on, with an intraday low of $372.80. It closed at $377.76, down 0.2% from the prior close. The market did not read this report as a growth story. Management gave no 2027 numbers and pushed a fuller update to before year-end. On top of that, part of the quarter's profit came from $610M of favorable reserve development.
Our overall view is buy, but in the lower half of the band. The margin recovery is real: operating earnings rose from $4.3B to $6.6B. The medical care ratio improved 1.5 points year over year to 88.4%. Revenue, however, fell 0.4% year over year. Medicare Advantage membership shrank by about 830,000 in a year. The company is choosing profitability over growth. Three caveats pull the score down: the reserve benefit, the shrinking member base and 2027 uncertainty.
Full Review
The profit jump comes from pricing and contract cleanup.
The medical care ratio, the share of premiums spent on care, was 88.4%. A year earlier it was 89.9%, an improvement of 1.5 points. It is 1.7 points above the second quarter's 86.7%, but the second half of the year is seasonally costlier in this industry. The company credits plan design changes and new product pricing. The operating cost ratio also fell from 13.5% to 12.8%. As a result, earnings from operations rose from $4.3B to $6.6B. There is an asterisk. The ratio includes $610M of favorable prior-period reserve development. That means reserves set aside in the past proved larger than needed. There is no guarantee it repeats. So not all of the $4.69 in EPS should be counted as lasting earnings power. Our earnings day guide is a good place to start reading these lines.
Optum Health shrank its way back to profit.
Optum Health revenue fell to $22.9B, down 9.9% year over year. The company ties this to serving fewer value-based care patients in markets without enough clinicians. Yet the segment's earnings from operations jumped from $41M to $735M. The margin rose from 0.2% to 3.2%. Management says it is pacing appropriately toward its 6% to 8% target margin range, but calls it a multi-year effort. Optum Insight grew 2.9% to $5.5B in revenue, and its margin rose from 17.3% to 23.4%. Optum Rx grew 0.6% to $39.9B; its operating earnings rose from $1.5B to $1.7B. In short, total Optum revenue fell 3% year over year, but operating earnings climbed from $2.5B to $3.7B. This is not a decline story but an exit from unprofitable contracts.
Member losses are a deliberate choice, with a cost.
UnitedHealthcare's medical membership fell from 50.1 million to 48.3 million in a year. Medicare Advantage members dropped from 8.435 million to 7.605 million; the loss since year-end is 935,000. The company is putting price first by exiting unprofitable plans and narrow-network markets. According to the earnings call, Medicare Advantage margins should finish 2026 near the top of the 2% to 4% range. In Medicaid, management sees 2026 as the trough year, with core margins moderately better than negative 1%. It says a return to target margins is possible in 2028. On Star ratings, at least 69% of members will be in four-star-or-better plans for 2027. This protects margins in the short run. Over time it narrows the revenue base; UnitedHealthcare revenue fell 0.8% this quarter.
The 2027 question went unanswered on this call.
This is what pulled the stock lower during the day. CFO Wayne DeVeydt called the at-least-$20.50 outlook for 2026 a solid run rate on which to grow. "Current analyst consensus for 2027 may understate the opportunity ahead." Management pointed to the low end of its 13% to 16% long-term EPS growth target as a reasonable starting point. But there is no concrete range; the update is coming before year-end. The tone on costs was cautious. UnitedHealthcare CEO Tim Noel said costs remain stubbornly high across the entire healthcare landscape. Commercial cost trend is running above the initial 11% assumption, though management says it is stabilizing. Noel also flagged abuse of the No Surprises Act dispute process as a particular concern.
The threshold that changes the story: $23.17 for 2027.
The portable rule is simple. Adding 13% growth to the $20.50 base gives roughly $23.17 for 2027. If the outlook due before year-end is above that number, the margin recovery is proven. If it falls short, today's profit gains were limited to one-off items and repricing. The second number is the medical care ratio: staying below 90% in the fourth quarter without reserve help would build confidence. Cash supports the case. Operating cash flow was $25.1B over nine months, versus $18.6B a year earlier. The company bought back $5.0B of stock and paid $6.2B in dividends over nine months. Debt to capital stands at 41.7%, against a year-end target of about 40%. For how buybacks affect a stock, see our buyback guide.
Looking Ahead
Strengths and Risks
5 Strengths · 6 RisksStrengths
5- Adjusted EPS of $4.69 beat the $4.14 market expectation by 13.3%.
- The full-year adjusted EPS outlook was raised for the third time this year, to at least $20.50.
- The medical care ratio improved 1.5 points year over year to 88.4%.
- Optum Health earnings from operations rose from $41M to $735M.
- Nine-month operating cash flow of $25.1B beat the prior year's $18.6B.
Risks
6- Quarterly results include $610M of favorable reserve development, which is not guaranteed to repeat.
- Revenue fell 0.4% year over yearOptum Health revenue shrank 9.9%.
- Medicare Advantage membership fell from 8.435 million to 7.605 million in a year.
- Management gave no numerical 2027 outlookUncertainty may last until year-end.
- Commercial cost trend is running above the initial 11% assumption.
- Debt to capital is 41.7%, above the target of about 40%.
What to Watch
4- October 15, 2026Medicare annual enrollment opens; demand for 2027 plans will show the pace of member losses.
- December 7, 2026Medicare annual enrollment closes.
- Before year-end — management will give a fuller update on the 2027 outlook.
- ~January 2027Q4 2026 results; watch the medical care ratio without reserve help.
Upcoming Earnings
To Understand This