Why UnitedHealth Stock Rocketed Nearly 7% Higher Today
A convincing bottom-line beat helped increase the share price of big health insurer UnitedHealth Group (NYSE: UNH) on Tuesday. Investors liked what they saw with the company's second-quarter results, and rewarded it by pushing the stock nearly 7% higher in value across the day. That compared very favorably to the S&P 500 index, which inched up by less than 1%.
Top- and bottom-line increases
In the quarter, UnitedHealth booked revenue of $98.9 billion, which was 6% higher on a year-over-year basis. Much of the growth came from the company's sprawling Optum healthcare services division, the unit that provides the bulk of its revenue. Optum's top line for the quarter was $62.9 billion, nearly 12% higher than the take in the same quarter of 2023.
As for profitability, that also saw an increase. On a non-GAAP (generally accepted accounting principles) basis, net income landed at just over $6.3 billion, or $6.80 per share. That easily topped the nearly $5.8 billion of the year-ago period.
Both headline fundamentals beat the consensus analyst estimates. Prognosticators tracking UnitedHealth stock were modeling $6.67 per share for adjusted profitability, as well as revenue slightly above $98.7 billion.
In its earnings release, the company attributed its gains to a higher customer count for both Optum and its foundational UnitedHealthcare division.
Earnings guidance reiterated
UnitedHealth reiterated its existing guidance for full-year, adjusted net income. It continues to believe this line item will come in at $27.50 to $28.00 per share. The consensus analyst estimate of $27.59 falls squarely within this range.
The company did not provide any revenue guidance in the earnings release.
Should you invest $1,000 in UnitedHealth Group right now?
Before you buy stock in UnitedHealth Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $787,026!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of July 15, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
Why UnitedHealth Stock Rocketed Nearly 7% Higher Today was originally published by The Motley Fool