UnitedHealth Group (NYSE: UNH) shares experienced a sharp decline, hitting a new 52-week low of $401.03 in recent trading sessions. This marked a significant downturn for the healthcare giant, reflecting a drop of approximately 29.34%, or $166.53, from previous levels, as the company confronts substantial market challenges and operational headwinds.
The primary catalyst for the stock’s plunge was UnitedHealth’s first-quarter 2025 earnings report, which fell short of Wall Street expectations. The company reported revenue of $109.6 billion and adjusted earnings per share of $7.20, missing consensus estimates.
More critically, UnitedHealth drastically cut its full-year 2025 profit forecast, citing significantly higher-than-anticipated medical costs. The adjusted earnings guidance was lowered to a range of $26.00 to $26.50 per share, a steep reduction from the prior outlook of $29.50 to $30.00.
Company executives attributed the forecast revision to a surge in demand for outpatient and physician services within its Medicare Advantage plans, which cater to seniors and individuals with disabilities.
This increased care utilization drove medical costs higher than the company had planned for in 2025. CEO Andrew Witty acknowledged the performance shortfall, stating the company “did not perform up to our expectations” and affirmed that management is “aggressively addressing those challenges.” The market reaction was severe, with UNH stock tumbling nearly 20% immediately following the announcement on April 17th, marking one of its worst single-day drops in years.
The fallout extended beyond UnitedHealth, impacting the broader health insurance sector. Shares of competitors like Elevance Health, CVS Health, and Humana also declined as investors worried about rising medical cost trends across the industry.
This comes after a challenging period for health insurers, who have been navigating lower government payment rates for Medicare Advantage plans and increased public scrutiny.