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New: Instantly spot drawdowns, dips, insider moves, and breakout themes across Maps and Screener.
Health insurance company UnitedHealth Group missed on sales but met expectations for adjusted earnings this morning.
GAAP earnings fell nearly 100% however, sparking a sell-off.
Shares of health insurance giant UnitedHealth Group (NYSE: UNH) stock imploded this morning, falling 19% through 11 a.m. ET after reporting Q4 earnings. The weird thing is... UnitedHealth didn't miss earnings, or at least not at first glance.
Analysts forecast UnitedHealth to earn $2.11 per share on $113.7 billion in sales. Sales came up short at $113.2 billion, but earnings were on target at $2.11 per share, adjusted for one-time items (i.e., non-GAAP).
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Image source: Getty Images.
So earnings were on target... or were they? At first glance, things look fine for UnitedHealth Group. Quarterly sales grew a respectable 12% in Q4, and adjusted earnings were at least no worse than expected. Dig a little deeper, though, and you'll notice that UnitedHealth's earnings from operations were only $380 million -- a year-over-year decline of 95%!
Worse, on the bottom line, earnings calculated under generally accepted accounting principles (GAAP) evaporated. UnitedHealth earned $5.98 per share in Q4 2024; in Q4 2025, however, it earned just $0.01 per share.
That's within one rounding error of a 100% decline.
Granted, for the full year, things were a bit better. 2025 sales grew about 12% to $447.6 billion, and while earnings declined, they didn't disappear entirely. UnitedHealth reported $13.23 per share for all of 2025, a 15% decline.
Investors should see some improvement in 2026. Despite all the headlines today about flatlining Medicare Advantage rates, UnitedHealth forecasts 2026 sales of "greater than $439 billion." That's not growth; it's a decline of up to 2%. Regardless, GAAP earnings should rebound to $17.10 or more, giving UnitedHealth stock a forward P/E ratio of about 16.7.
At that price, today's UnitedHealth sell-off just might turn out to be a buying opportunity.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
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