UnitedHealth Stock Crashes After CEO Exit And Criminal Investigation Report: Is UNH A Buy Or A Warning Sign?

When it comes to healthcare in the U.S., few companies are as essential or as powerful as UnitedHealth Group (UNH).

With operations across health insurance, pharmacy benefits, data analytics, and direct healthcare services, UnitedHealth isn’t just an insurer, it’s a full service healthcare ecosystem that touches nearly every part of a patient’s journey.

While competitors like CVS Health and Cigna have tried to replicate its integrated model, UnitedHealth remains ahead thanks to its scale, advanced data tools, and long-term relationships with employers and government programs.

Its Optum division alone spans pharmacy benefit management, outpatient care, and analytics, which help the company deliver value and reduce healthcare costs across the board.

Yes, UnitedHealth is facing fairly serious near-term challenges: a possible criminal investigation into its Medicare Advantage billing, a sudden CEO departure, and rising healthcare costs have rattled investor confidence.

The stock has fallen over 50% from its highs, and the company has suspended its 2025 guidance. 

But its strong balance sheet, conservative debt, and long history of navigating regulation give it a solid foundation to recover.

Still, UNH isn’t without risk. Regulatory pressure is growing, Medicare fraud allegations could lead to fines, and internal conflicts between its business units may create more turbulence.

But with healthcare demand rising and UnitedHealth deeply embedded in every part of the system, many believe it will bounce back once the storm clears.

So is UnitedHealth a healthcare giant in trouble or a buying opportunity in disguise?

Let’s break it down using the Invest Diva Diamond Analysis (IDDA) Framework:

Capital, Intentional, Fundamental, Sentimental, and Technical.

IDDA Point 1 & 2: Capital & Intentional

Before investing in UnitedHealth (UNH), ask yourself:

✅ Are you looking for a long-term compounder deeply embedded in the U.S. healthcare system?
✅ Do you believe in the power of vertical integration where insurance, data, and care delivery are all under one roof?

✅ Are you comfortable riding through regulatory waves, leadership transitions, and the possible criminal investigation in an asset that is considered steady and recession resistant?

UnitedHealth isn’t a flashy tech play or the next viral stock but that’s why it’s a foundational piece in many institutional portfolios. While others chase hype cycles, UNH quietly dominates the healthcare industry, serving over 150 million individuals through its Optum and UnitedHealthcare divisions.

With the recent concerning headwinds, let’s have a look at its fundamentals.

Don’t know your risk tolerance? Get Kiana Danial’s risk management toolkit for free here

IDDA Point 3: Fundamental

🔹 UnitedHealth Group runs a powerful healthcare empire that includes insurance (UnitedHealthcare), pharmacy services (Optum Rx), healthcare providers (Optum Health), and health data tools (Optum Insight). This all-in-one strategy helps lower costs and improve patient care, and it has inspired copycats like CVS and Cigna. The company is built to grow steadily (aiming for 13–16% earnings growth) no matter what happens with government rules. It uses data to give patients and caregivers a complete picture of care options and aims to deliver better value than competitors, even if some worry about profit motives outweighing patient care.

🔹Sharp Stock Decline Triggered by Multiple Headwinds
UnitedHealth shares have dropped sharply after a tough week filled with bad news, including a report of a possible criminal investigation into how the company rated patient risks under Medicare Advantage, a government insurance program for seniors. Although UnitedHealth says it hasn’t been officially notified, this comes right after the company pulled its 2025 financial forecast due to rising healthcare costs and replaced its CEO with former leader Stephen Hemsley. While Medicare Advantage makes up only a small part of its business, the news raised fears of possible fraud, large fines, and weaker future profits. These issues add to broader concerns about regulatory pressure and internal conflicts between UnitedHealth’s business units.

🔹 Attractive Valuation Opportunity
Based on a discounted cash flow (DCF) analysis, the stock appears significantly undervalued, trading at a roughly 45% discount from its intrinsic value.

🔹 Strong Core Operations
Despite the negative headlines, the business remains robust, generating approximately $400 billion in annual revenue and close to $30 billion in operating income. Its Medicare Advantage division alone accounts for around 79% of its total revenue, showing the strength of its healthcare services model.

🔹 Solid Dividend Profile
The company offers an appealing dividend yield of 2.7% (equating to $8.40 per share annually), supported by a conservative 30% payout ratio and a consistent track record of dividend growth.

🔹 Strong Financial Position
UnitedHealth is in strong financial health. As of late 2024, it had about $77 billion in debt, but that’s manageable given it brings in around $21 billion in free cash flow each year. Its operating arms hold most of its $81 billion in cash and investments. While it continues to pay billions in dividends and stock buybacks, it also spends on acquisitions to grow. Still, with rising regulatory risks and possible fines, the company may decide to hold onto more cash going forward to stay flexible.

Fundamental Risk: Medium-High

IDDA Point 4: Sentimental

Strengths:

✅Deep Discount Drawing Interest: The recent 50% stock price drop may have already priced in much of the bad news, creating buying interest among value-focused and long-term investors.

✅Reinstated Leadership: The return of former CEO Stephen Hemsley who has a track record of guiding the company through previous periods of growth which brings a sense of stability and leadership continuity.

✅Defensive Business Model: The company operates in essential sectors like insurance and healthcare, which are typically resilient during economic downturns.

Risks:

❌DOJ Investigation Speculation: Unverified reports of a Department of Justice probe are weighing on sentiment, even in the absence of formal charges.

❌Public Relations Struggles: High-profile lawsuits and public criticism are starting to wear down the brand’s reputation and investor patience.

❌Leadership Transition Concerns: The CEO’s exit during a time of turbulence adds uncertainty around the company’s strategic direction. If the new leadership doesn’t fix the current issues, it could face more trouble ahead.

Currently UnitedHealth (UNH) is facing sharply negative sentiment following a series of destabilizing events, including a sudden leadership shake-up, and a potential DOJ investigation into Medicare fraud.

The company’s suspended 2025 guidance and lack of near-term clarity have further rattled investor confidence, especially as healthcare peers like CVS, HUM, ELV, and CNC show more resilience.

As a result, the market has significantly de-risked UNH, with growing concerns over additional regulatory and legal headwinds.

Want our top stock picks and analysis every month? Get our monthly newsletter here. 

Sentimental Risk: High

IDDA Point 5: Technical

On the weekly chart, UNH was in a strong uptrend from 2020 to 2022, followed by a long period of sideways consolidation.

It eventually reached a new all-time high around $625, but shortly after, the stock plunged due to recent negative news and headwinds falling as far as the 78% Fibonacci retracement level.

Right now, the technical signals are bearish:
🔻 The Ichimoku cloud is red in the future, indicating continued downward momentum
🔻 There’s a sharp downtrend with several bearish engulfing candles
🔻 Price is well below the cloud, showing strong downward pressure
🔻 The Kijun line has crossed below the Tenkan line, forming a death cross, which is another classic bearish signal

Investors looking to get into UNH can consider these Buy Limit entries:

📌Current Market Price 302.98

📌268.39

📌172.56

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Technical Risk: High

Final Thoughts on UnitedHealth

UnitedHealth Group (UNH) is one of the most powerful forces in U.S. healthcare, with a vertically integrated business spanning insurance, pharmacy benefits, data analytics, and direct care.

However, the company is currently facing major headwinds.

A possible criminal investigation into its Medicare Advantage billing practices, rising medical costs, regulatory scrutiny, and a sudden CEO exit have shaken investor confidence sending the stock down more than 50% from its all-time highs.

Despite this turbulence, UnitedHealth’s fundamentals remain strong. Its Optum and UnitedHealthcare divisions serve over 150 million people, and it continues to generate robust cash flow and dividend growth.

Former CEO Stephen Hemsley’s return provides some leadership stability, and with healthcare demand rising due to an aging population, the company is well-positioned to benefit from long-term tailwinds once 

current uncertainties settle.

➡️ Recommendation: Buy or Hold / High Risk Asset – For medium to high risk-tolerant investors with a long-term outlook, UNH may present a rare buying opportunity at a steep discount. While the company’s scale, cash reserves, and essential role in healthcare make it a strong long-term candidate, near-term volatility is likely to persist. Success will depend on how well leadership navigates regulatory challenges, restores public trust, and stabilizes operations. Patient, value-focused investors who believe in the resilience of healthcare infrastructure may find UnitedHealth an attractive long-term play but caution, diversification, and smart entry points are essential.

Overall Stock Risk: High

Want to become a self sufficient Triple Compounder who no longer needs to read this blog?

Attend this free Triple Compounding Training here 👇👇

Register FREE Now! Get Your Risk Management Toolkit And Workbook FREE When You Attend

If you enjoyed my blog post about the ‘UnitedHealth Stock Crashes After CEO Exit and Criminal Investigation Report: Is UNH a Buy or a Warning Sign?’, you’ll love my post on ‘Nvidia Stock Forecast 2025: Must Know Updates That Could Impact Your Wealth Strategy’

Disclosure: I am not a financial advisor, and this is not financial advice. This information is for educational purposes only. This post about ‘UnitedHealth Stock Crashes After CEO Exit and Criminal Investigation Report: Is UNH a Buy or a Warning Sign?’ may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please see the terms of service page for more information.