UnitedHealth Group Stock Plunges After Disappointing Q2 Results, Ongoing Civil Investigation

UnitedHealth Group's stock has plunged following the release of its Q2 results, which many industry analysts have described as 'disappointing' amid continued challenges in its operations. Moreover, this also follows a current civil and criminal investigation related to probes into its Medicare practices.

Stock's Lowest Level

UnitedHealth Group shares plunged to roughly $268 (£200.91), their lowest level since 2020, after Q2 earnings fell short, even as revenue reached $111.6 billion (£83.66 billion). Adjusted EPS came in at $4.08 (£3.06) versus forecasts of $4.48+ (£3.36+), prompting the company to reduce its full‑year outlook to at least $16 per share.

Despite legal pressures and cost overruns, analysts maintain a 'Moderate Buy' consensus, with average price targets between $392 and $435 (£293.86 and £326.10)—suggesting potential upside of 40–50% over the coming year.

More on UHC's Q2 Results

It is worth noting that the company's net income decreased 19% to $3.41 billion (£2.56 billion). Moreover, the medical-loss ratio rose to 89.4%, reflecting the increasing costs of healthcare, particularly in Medicare Advantage, which outpaced premium increases.

The company also reinstated full-year 2025 guidance, forecasting $445.5 billion to $448.0 billion (£333.97 billion to £335.84 billion) in revenue and adjusted EPS of at least $16.00 (£11.99), a sharp cut from earlier projections of up to $30/share (£22.49). It should be recalled that the company announced in May that it would suspend its 2025 outlook.

'Embarking on a Rigorous Path'

Following the release of UnitedHealth Group's Q2 results, its CEO Stephen Hemsley stated that the company has 'embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society'.

'As we strengthen operating disciplines, positioning us for growth in 2026 and beyond, the people at UnitedHealth Group will continue to support the millions of patients, physicians and customers who rely on us, guided by a culture of service and longstanding values,' he stated.

During the company's latest earnings call, Tim Knoll, Head of UnitedHealthcare, emphasised the seriousness of current challenges, remarking, 'We know these are serious challenges. We are humbled by them.'

Moreover, Patrick Conway, CEO of Optum, highlighted the potential of value-based care, saying, 'Value-based care has the potential to transform health care.'

More on Its Current Investigations

The company had recently confirmed that it is under investigation by both the US Department of Justice and the US Department of Justice concerning its Medicare Advantage business practices.

The probes focus on allegations that the company encouraged or incentivised staff and healthcare providers to record diagnoses that inflated government payments.

'[The company] has proactively launched its initiative to conduct third-party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services, the company said in a press statement.

Other reports have suggested that former employees have been questioned, and the investigations involve the DOJ's healthcare‑fraud unit, the FBI, and the HHS Office of Inspector General.

In response to this, UnitedHealth states that it has proactively reached out to the DOJ, is fully cooperating, and maintains confidence in its compliance, while launching third-party reviews of coding and managed care operations.

A Turbulent Future Ahead

While Q2 2025 earnings fell short and prompted a significant downgrade in full-year guidance, the company maintains strong revenue growth and remains optimistic about its long-term prospects. However, the DOJ's criminal and civil investigations into Medicare Advantage practices raise serious concerns about compliance and corporate governance.

As investors weigh the risks, UnitedHealth's future will hinge on its ability to restore trust, manage medical costs, and navigate legal challenges—factors that will determine whether its stock can rebound meaningfully in 2026 and beyond.