To The Moon

$UnitedHealth(UNH)$  

⚠️ UNH Missed Guidance and Plunged: A Buy at $250?

$UNH$ stumbled after Q2 earnings — dropping over 5% premarket as EPS came in below expectations.

🧾 EPS: $4.08 vs $4.45 expected

💵 Revenue: $111.62B vs $111.59B forecast

📉 Immediate market reaction: Sharp selloff to $250 — a 52-week low

So… is this a value-buying opportunity for a healthcare giant? Or are there deeper structural issues in play? Let’s break it down. ⚖️

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💊 Behind the Numbers: Was This Miss Predictable?

While UNH beat revenue forecasts, it missed on earnings due to rising costs.

🧬 The key culprit: Medical Cost Ratio (MCR) — which measures how much UNH pays out in care vs what it collects in premiums — ticked above expectations.

🩺 Elective surgeries are rising again post-pandemic, which pushed utilisation rates higher. Combine that with elevated costs in Medicare Advantage, and margins took a hit.

📉 While revenue climbed, earnings fell short as care delivery outpaced pricing power — a rare mismatch for a historically disciplined operator.

Translation for investors?

> Solid top-line growth, but squeezed profitability — especially in government-backed insurance lines.

🧠 UNH: Still the Healthcare Behemoth

Zooming out, UnitedHealth remains a dominant force in U.S. healthcare.

🏥 It’s the largest private insurer in the U.S., with deep entrenchment in Medicare, Medicaid, and employer plans.

💰 Generates reliable cash flow through Optum (its health services arm) and diversified payer networks.

⚕️ In a defensive sector, UNH has often been the “safe compounder” — even during macro shocks.

> Even when it stumbles, UNH remains a pillar of healthcare stability.

So the real question is: does this earnings miss break the thesis? Or is it simply a one-quarter reset?

💸 $250: Buying Opportunity or Value Trap?

$250 is a level not seen since early 2023 — and for some, that’s a flashing “buy the dip” signal.

📉 Current P/E: ~17x forward — vs 5-year average of 20x+

📈 Dividend yield has climbed to ~1.7% — not flashy, but solid given payout history

📊 Institutional investors still hold >80% of shares — and no major exits reported (yet)

However, some analysts (e.g., Morgan Stanley, RBC) have reduced price targets, citing near-term cost uncertainties.

Valuation watchers might argue:

💵 UNH is now trading near historical support levels

🤔 But risks remain if cost inflation proves sticky into 2H 2024

Bottom line: $250 could be a value zone — but only for investors comfortable riding short-term volatility.

📊 Buy the Dip? Or Wait for Confirmation?

Earnings season often stirs emotional moves, and this one’s no exception.

Is this pullback based on fundamentals — or a market overreaction to a modest miss?

📈 Some contrarian investors see a chance to scale into a long-term leader at a discounted multiple

📉 Others argue it’s wiser to wait for next quarter’s margin trends before jumping in

Key sentiment clues:

🧾 UNH reaffirmed full-year revenue, but tightened EPS guidance

🔍 No new buyback announcements — possibly signaling caution

🧠 Options market shows elevated implied volatility around August expiry

This is a watch-the-next-move moment, not just a reflex buy.

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🗣️ Your Turn: Would You Buy at $250?

💭 UNH has long been seen as a steady compounder — but does a miss at this stage mark a turning point or a temporary detour?

📈 Will $250 prove to be a long-term entry point for patient investors?

📉 Or is the market pricing in a structural shift in healthcare margins?

👉 What’s your move? Buying the dip, sitting out, or watching next quarter’s guidance?

💬 Share your view — let’s hear what the Tiger community thinks.

> Disclaimer: This is not financial advice. For informational and educational purposes only.

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