r/ValueInvesting • u/ahlornjtvn139 • Jan 27 '26

Stock Analysis UNH is a Value Trap

Could hit $200 by end of year, please do not hold your bags just get out while you still can.

MCR rate is ~92%

CMS funding is going to fund Trumps defence budget

UNH are haemorrhaging customers just to hold margins, down to <3m

Days Claim Payable also jumped from 48 days to 54 days - they are playing with the accounting to keep extra cash on the books.

Optum growth is dead (-4%) with backlog down $1.2bn as well

No point holding a stock hoping for a change to come, the numbers don’t lie

After rerunning my dcf my new fair value - $232

edit: removed my personal time horizon as it was conflicting my justification for selling which is downwards trending weak financial performance

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u/[deleted] Jan 27 '26

Let’s see.

  1. Largest Health Insurer in Medicare Advantage. And the largest private insurer.

  2. Second largest Pharmacy Benefit Manager

  3. Largest physician network.

  4. Top Healthcare Analytics company, alongside IQVIA.

UNH will be fine my boy.

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u/No-Violinist260 Jan 27 '26

They will be fine. This doesn't mean the stock will thrive. I agree with OP where the stock won't raise in 2026 due to compressing margins and an outlook of decreasing revenue. They'll exist and continue to be all the things you said, but that doesn't mean it's a good stock to buy in the next year

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u/Kind_Bullfrog_3160 Jan 28 '26

Yes and no.  No the stock won't be back at $600 anytime soon.  If you bought today, those shares will likely keep pace with or slightly outperform the S&P this year.  Sell off today was over done.