UnitedHealth stock jumps as profit and outlook signal start of turnaround

Strong financial results are hinting at a turnaround for UnitedHealth Group investors.

The Eden Prairie-based health care giant increased its profit outlook for the year and reported first quarter revenue and earnings that surpassed analyst expectations.

The company, which runs the massive UnitedHealthcare health insurance business, said in a quarterly call with investors that it better controlled medical costs between January and March while continuing investments in artificial intelligence technology to boost efficiency.

UnitedHealth Group also highlighted a series of company shifts since former CEO Stephen Hemsley returned to the job in May, when UnitedHealth’s stock price was plunging amid eroding confidence in its huge business running health plans for Medicare beneficiaries.

Hemsley has made changes to nearly half of the top 100 leadership roles within the company while continuing to exit non-U.S. businesses and expanding investment in the United Health Foundation.

The company’s share price Tuesday, April 21, increased more than 9.5% in early trading.

“We’re encouraged by the way the year has started,” Stephen Hemsley, the UnitedHealth Group chief executive officer, told investors.

It’s been a rocky road for UnitedHealth Group investors since November 2024, when the company’s stock was trading at more than $600 and setting records.

Rising medical costs and surprisingly poor financial performance drove a stunning sell-off during the first half of last year. The decline followed the December 2024 killing of UnitedHealthcare CEO Brian Thompson, as he walked on a public sidewalk to an investor conference in New York City.

For much of the past year, UnitedHealth Group shares have languished at less than $350.

The company in January forecast its first annual revenue decline in more than a decade, but the outlook Tuesday improved considerably.

UnitedHealth Group said it posted a profit of $6.28 billion during the first quarter on $111.7 billion in revenue. Analysts expected revenue of about $109.7 billion.

Adjusted earnings per share came in at $7.23, far surpassing the $6.61 expected by analysts.

The company said it now expects adjusted earnings per share of more than $18.25 this year, up from the $17.75 forecast in January.

Beyond health insurance, UnitedHealth Group runs a fast-growing health care services business called Optum that includes one of the nation’s largest pharmacy benefit managers (PBMs).

The Federal Trade Commission announced in February a large settlement with another of the nation’s largest PBMs, Express Scripts, Inc., that requires the company to change business practices to increase transparency and lower out-of-pocket costs for patients.

Asked about the settlement and related legislation, Jon Mahrt, the Optum Rx CEO, said recent record growth in the company’s PBM business stemmed in part from “a compelling 15-part transparency guarantee” to customers.

During the first quarter, UnitedHealth Group reported a medical loss ratio of 83.9%, significantly lower than forecast by analysts and better than much of the past two years. The metric is widely watched by investors because rising ratios tend to indicate that cost increases are outstripping premiums and stripping profits.

“We are seeing early signs of improved alignment between pricing and medical cost trends,” said Wayne DeVeydt, the company’s chief financial officer.

Tim Noel, the UnitedHealthcare CEO, said the company saw “modest favorability” with costs in government programs including Medicare Advantage during the first quarter, but he cautioned the shift is not an inflection point.

“It’s really early right now,” Noel said.

Going into 2026, UnitedHealthcare said it would increase premiums to better cover costs, even though a significant number of subscribers might jump to other insurers.

Medicare Advantage enrollment fell by 965,000 people during the first quarter. About 49 million people in the U.S. had UnitedHealthcare coverage at the end of March, down from about 50 million a year earlier.

UnitedHealthcare’s earnings from operations were $5.7 billion between January and March compared to $5.2 billion in the first quarter 2025. The operating profit margin was 6.6%, compared with 6.2% during the same period last year.

Overall, the numbers released Tuesday amounted to a second win this month for the company, coming just over two weeks after the federal government announced payment rates for Medicare Advantage health plans in 2027 will be higher than first forecast in January.

The government’s initial rate notice drove a one-day 20% decline in the company’s share price in January.

UnitedHealthcare is the nation’s largest seller of Medicare Advantage health plans to seniors. The business has been dogged by accusations that large insurers game federal rules in the market to maximize risk adjustment payments.

Last year, UnitedHealth confirmed its cooperation with a Justice Department investigation into its Medicare practices, but the company has long defended it uses diagnosis data to secure risk adjustment revenue.

UnitedHealth Group is Minnesota’s largest company by revenue. It ranks #10 among large employers in the state, with about 18,000 workers.

Overall, the company employs about 390,000 people, down from peak employment of 440,000 in 2023. The headcount decline has stemmed in part from the company’s decision two years ago to sell its large hospital, clinic and insurance business in Brazil.

During his previous period as CEO, Hemsley presided over a period of unprecedented growth at UnitedHealth Group between 2006 and 2017.

Since returning to the job in May 2025, the changes he’s made to nearly half of the company’s top 100 executive positions have been a combination of new hires and internal moves, according to a company spokesman.

On Tuesday, Hemsley said UnitedHealth Group is on track to invest $1.5 billion in AI technology this year alone. He said the application of technology has “long been foundational to how this enterprise operates.”

The company during the first quarter sold its Optum UK business, with $400 million in net proceeds committed to the United Health Foundation. Previously, UnitedHealth Group announced last year plans for investing $150 million in the company’s charitable arm.

The foundation will do more, Hemsley said, to improve rural health care, expand the health care workforce and strengthen maternal/child health and behavioral health.

“We are invested in the notion that the foundation can be used as a means to really advance the health care system, be part of the responsibility we bear for that,” he told investors Tuesday. “We did that in the past, and have kind of strayed from that in the last few years.”

At about 9:40 a.m. CT, UnitedHealth Group shares were trading at $354.79, up more than 9.5% for the day.

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