UnitedHealth Group (UNH 2.57%) faced a number of challenges in 2025 that weighed on stock performance: from the higher costs of healthcare, which hurt earnings, to a Justice Department probe into its Medicare billing practices. The stock slid 53% from the start of the year through early August.
But the health insurance giant didn't sit still. Instead, UnitedHealth made moves to address its earnings challenges, commissioned an independent review of its processes to ensure top performance, and set solid recovery and growth goals. All of this helped the stock rebound 38% from its low through the end of the year.
The tide hasn't yet turned for UnitedHealth, though. Just this week, two headwinds drove the stock to a 20% decline in one trading session. Let's take a closer look.
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UnitedHealth's struggles
As mentioned, UnitedHealth has faced several stumbling blocks over the past year, and the one that took the spotlight again this week is the company's struggle to renew earnings growth. The insurer reported results for the fourth quarter of 2025, with earnings per share surpassing analyst estimates by only 1 cent -- a narrow beat, and on top of that, UnitedHealth's revenue forecast for 2026 disappointed investors.
The company expects this year's revenue to surpass $439 billion, but that represents a 2% year-over-year decline. This is as UnitedHealth manages challenges such as the rising cost of healthcare and repositions its businesses for long-term growth.
NYSE: UNH
Key Data Points
A move that could hurt margins
A second disappointment joined this lower-than-expected forecast, and this came in the form of a Trump administration proposal. The administration proposed keeping rates flat for Medicare Advantage insurers in 2027, a move that could hurt the margins of UnitedHealth and other industry heavyweights. In a market of rising healthcare costs and increased use of healthcare services, this represents an additional headwind as UnitedHealth attempts to reignite growth.
If this proposal is put into action, UnitedHealth might have to consider further cuts to benefits, additional premium increases, or other actions to work toward its growth goals.
Investors have been betting on UnitedHealth as a potential recovery story, but these two headwinds suggest the company's turnaround may include more bumps along the road than expected and will take some time -- possibly more time than some investors would have liked.
Still, it's important to keep in mind that UnitedHealth is the market leader as the U.S.' biggest health insurer and the fact that it operates an insurance business, UnitedHealthcare, and a health services unit, Optum, offers it a competitive advantage. So patient investors may want to give this beaten-down stock a chance and hold on for the long term.
