UnitedHealth Group (NYSE: $UNH) reported its first-quarter 2025 earnings, but the results and revised guidance disappointed investors. As of 12:47 PM EDT, the stock was trading at $453.88, down $131.16 (22.42%) — its steepest one-day drop in over two decades.
Total revenue for the quarter rose to $109.6 billion, reflecting a $9.8 billion increase compared to the same period last year. Net earnings came in at $6.85 per share, while adjusted earnings stood at $7.20 per share. Despite the revenue growth, UnitedHealth revised its full-year earnings outlook significantly.
The company now expects net earnings in the range of $24.65 to $25.15 per share, with adjusted earnings between $26.00 and $26.50. This is a downward revision from the guidance issued in December 2024.
Two primary issues influenced this change. The first is a sharp rise in care activity within UnitedHealthcare’s Medicare Advantage segment, especially in physician and outpatient services, which exceeded expectations set for 2025. The second involves changes in the Optum Health member profile. Many of these changes stemmed from lower-than-expected engagement in 2024 by plans that are now exiting various markets, combined with greater-than-expected cost impacts from new and complex Medicare patients.
Still, UnitedHealthcare has added 780,000 new consumers since the start of the year. Meanwhile, Optum Health remains on track to serve 650,000 new value-based care patients in 2025. CEO Andrew Witty stated that the company is taking aggressive steps to overcome these challenges and return to its long-term earnings growth target of 13% to 16%.
Technical Analysis
UnitedHealth shares experienced a sharp breakdown following the earnings release. The drop of over 22% marked the company’s worst single-day performance in 25 years.
Looking at the 3-day candlestick chart, the stock fell to a low of $448. This breakdown was confirmed by high volume, indicating strong selling pressure and investor panic.
Two important support levels are visible. The first, near the $445–$450 range, is currently being tested. If this level holds, a short-term rebound may follow, filling a huge gap lying above. The second support zone is located around $387.91, aligning with a major low. Price is likely to test this low if the current support does not hold.
All major moving averages, 50, 100, and 200, have been broken and now sit above the current price, indicating that bearish momentum remains dominant. A recovery will require the price to reclaim and hold above $450 with strong rising volume and momentum.
Is It the Right Time To Buy?
At its current price of $453.88, UnitedHealth stock is significantly discounted following the sharp drop. However, the outlook remains uncertain in the short term.
The lowered guidance reflects underlying operational and reimbursement issues in both Medicare Advantage and Optum Health. While revenue continues to grow, earnings have come under pressure, and investor confidence has weakened.
External macroeconomic risks also affect the sector. Tariffs on Chinese imports may increase costs, especially since many U.S. healthcare companies rely on Chinese contract research and manufacturing partners. This dependency makes reshoring expensive and difficult.
According to McKinsey, healthcare EBITDA is projected to grow from $676 billion in 2023 to $987 billion by 2028, at a compound annual growth rate of 7%. Although the long-term industry outlook remains positive, UnitedHealth needs to stabilize operations to benefit from that growth.
From a technical standpoint, buying at current levels carries risk. If the stock breaks below $445, the next support lies near $387. However, if it stabilizes and moves above $480, a recovery could begin. Until then, caution is advisable, and new positions should be considered only if strong support holds or a reversal is confirmed.
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