UNH

The primary reason for the stock's downturn was the company's reporting of earnings that fell short of Wall Street's expectations. UnitedHealth reported adjusted earnings of $7.20 per share on revenue of $109.58 billion for the first quarter, missing the consensus estimates of $7.29 per share in earnings and $111.53 billion in revenue. Additionally, the company lowered its full-year 2025 adjusted earnings guidance to a range of $26.00 to $26.50 per share, down from the previous forecast of $29.50 to $30.00. This revision reflects the company’s expectation of continued elevated healthcare utilization trends, which contributed to the negative sentiment surrounding the stock.

The disappointing results were primarily attributed to higher-than-anticipated healthcare utilization among Medicare Advantage members, particularly for outpatient and physician services. This increase in healthcare utilization, coupled with the revision in guidance, suggests that UnitedHealth is facing significant challenges in managing healthcare costs, which has likely impacted investor confidence.

The company's revised outlook and Q1 miss raised concerns among investors about UnitedHealth's ability to navigate the evolving healthcare landscape. The significant drop in UNH stock underscores the market's sensitivity to shifts in healthcare utilization and the importance of accurate forecasting in the insurance industry. These factors, combined with the company's admission of not meeting expectations, have likely contributed to the negative sentiment and subsequent stock price decline.