UnitedHealth Shares Plunge on Bleak Revenue Forecast

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January 27, 2026, marked a historic sell-off for UnitedHealth Group, with its stock plummeting approximately 20% in a single trading session. The dramatic decline was triggered by a dual blow of disappointing annual results and a forward-looking projection that signaled the company's first annual revenue contraction in more than three decades.

While the healthcare giant reported a 12% year-over-year increase in total revenue for 2025, reaching $447.6 billion, its guidance for the coming year sent shockwaves through the investment community. UnitedHealth anticipates revenues to exceed $439 billion in 2026, implying a decline of roughly 2%. This would represent the first time since 1989 that the company has posted a year of shrinking sales.

The negative outlook was compounded by a separate announcement from the U.S. Centers for Medicare & Medicaid Services (CMS). The agency revealed that reimbursement rates for Medicare Advantage plans would see a mere 0.09% increase in 2027, a figure drastically below the 4% to 6% rise that sector analysts had been anticipating. This regulatory decision weighed on the entire managed care industry.

Profitability Metrics Under Strain

Fourth-quarter 2025 results had already highlighted mounting pressures:

• Revenue: $113.2 billion (versus expectations of $113.82 billion)
• Adjusted Earnings Per Share: $2.11
• GAAP Net Income: Just $10 million, or $0.01 per share

The quarter included special charges totaling about $1.6 billion. These costs stemmed from the cyberattack on its subsidiary Change Healthcare, alongside restructuring initiatives and business divestitures.

A key profitability metric, the Medical Care Ratio, climbed to 88.9% for full-year 2025. This ratio, which measures the proportion of premium dollars spent on medical care, was 3.4 percentage points higher than the previous year. Management is targeting a ratio of 88.8% for 2026.

Leadership Acknowledges Significant Challenges

Stephen Hemsley, who resumed the CEO role in May 2025, described a necessary period of restructuring for the company. In a concrete admission of competitive pressures, UnitedHealth now expects to lose between 1.3 million and 1.4 million Medicare Advantage members. This loss exceeds initial internal forecasts and is attributed to intense competition during the annual enrollment period.

Despite the headwinds, the company's 2026 forecast calls for adjusted earnings per share of more than $17.75. Operating earnings are projected to surpass $24 billion.

Sector-Wide Sell-Off

UnitedHealth's steep drop dragged down the broader managed care sector. Shares of Humana fell more than 20%, while CVS Health and Elevance Health declined between 10% and 14%. Trading volume for UnitedHealth exploded to 65.3 million shares—over six times its three-month average.

The single-day erosion in market value amounted to approximately $60 billion. The stock closed near $282, a stark drop from its $352 closing price the previous day. The event initiates a critical phase for UnitedHealth, where it must demonstrate that its announced transformation can restore growth and improve margins.