Is UnitedHealth Stock an Undervalued Stock to Buy Right Now? | UNH Stock Analysis

Parkev Tatevosian, CFA•Sep 25, 2026

Summary

Parkev states that UnitedHealth Group (UNH) experienced a difficult year in 2025 due to management underestimating customer care costs. However, the company's management made crucial adjustments by the end of 2025 and early 2026, including pulling out of unprofitable markets, divesting a health unit, and increasing insurance prices. These actions led to much better financial results than anticipated, prompting Parkev to revise his free cash flow estimates upwards by approximately $3 billion annually from 2026.

Despite the healthcare industry not being historically highly profitable with UNH's operating profit margin peaking below 10%, Parkev believes the company's strategic moves are paying off. While the operating profit margin is not expected to return to pre-2025 levels until 2027 or 2028, the current progress is significantly better than initially forecast. Parkev also notes that while the return on invested capital (ROIC) for UNH is not exceptionally high (8% recently), the business is not particularly risky based on its beta, though it did experience significant earnings volatility in 2025. Trading at a forward price-to-earnings ratio of 16.5, which is at the lower end of its historical range, Parkev sees this as an attractive entry point. He has consequently raised his intrinsic value estimate for UNH to $518 per share.

**UnitedHealth Group (UNH):** Parkev previously identified UNH as a buy opportunity when its stock price fell significantly in 2025, issuing recommendations at various price points between $230 and $280 per share. He notes that the company's proactive adjustments and subsequent better-than-expected financial performance have validated his earlier stance. Parkev continues to recommend UNH, projecting an upside potential of 39-40% over the next 12 to 18 months from its current price. He believes there's further room for management to improve operations, which investors can capitalize on.

Mentioned Stocks

UNH

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev has upgraded his free cash flow estimates for UnitedHealth by approximately $3 billion annually from 2026 due to better-than-expected improvements in the company's financial performance after significant adjustments made by management. These adjustments, which included pulling out of unprofitable markets, divestitures, and price increases, have led to a faster recovery than initially projected following a challenging 2025. The stock is currently trading at a forward P/E of 16.5, which is at the lower end of its historical range. Parkev calculates an intrinsic value of $518 per share and projects an upside potential of 39-40% over the next 12-18 months. He had previously recommended buying UNH when the stock crashed in 2025 at prices ranging from $230 to $280 per share, and he continues to view it as a strong buy opportunity.

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