UnitedHealth (UNH) Faces Sell Call Amid Margin Squeeze, Regulatory Risks
UnitedHealth (UNH, Financials) shares gained 1% Monday after newly reinstated CEO Steve Hemsley apologized for the company's first earnings miss since 2008 and vowed to restore shareholder trust at the annual meeting.
Warning! GuruFocus has detected 4 Warning Sign with UNH.
Hemsley replaced Andrew Witty last month amid fallout from the earnings shortfall and the suspension of full-year guidance due to soaring medical costs in the Medicare Advantage segment. The company also faces pressure from federal investigations and regulatory scrutiny over billing and drug pricing practices.
We are well aware we have not fulfilled your expectations or our own, Hemsley told shareholders. We apologize for that performance, and we're humbly determined to earn back your trust and your confidence.
Hemsley previously served as CEO from 2006 to 2013. Shareholders approved his new three-year pay package, which includes equity awards valued at $60 million. Proxy firms were split on the vote, with ISS opposing and Glass Lewis supporting the plan.
UnitedHealth is reviewing operations across all units, including Optum Rx and UnitedHealthcare. The U.S. Department of Justice is reportedly examining billing practices tied to its integrated Medicare Advantage services, though the company says it has not received a criminal notification.
The company's private insurance and 2026 Medicare Advantage plans will be adjusted to account for higher care costs, Hemsley said.
The CEO transition follows the December killing of UnitedHealthcare CEO Brian Thompson in New York, which added further disruption to the company's leadership stability.
Investors are now watching for updates on regulatory probes, Medicare audits, and Q2 cost trends that could shape UnitedHealth's revised guidance trajectory.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Nvidia Retains Top Pick as AI Momentum Grows
Nvidia (NASDAQ:NVDA) remains a top sector pick after Bank of America's Vivek Arya returned from investor events in San Francisco with very positive feedback on AI demand, reaffirming his Buy rating and maintaining a $180 price target. Arya noted that Nvidia's Blackwell rack-scale systems now account for about 70% of compute sales, with Blackwell Ultra production slated to begin in Q2 alongside Rubin and Feynman on track, underscoring seamless generational transitions and limited ramp costs. Warning! GuruFocus has detected 4 Warning Signs with NVDA. He highlighted that the recent lifting of AI Diffusion export rules opens a sovereign AI growth vectorsovereign governments and CSPs are expected to build their own foundational models, expanding Nvidia's addressable market beyond hyperscalers. Addressing China-related risks, Arya emphasized that Nvidia considers its China AI exposure fully de-risked after H20 export restrictions, meaning any future sales into the $50 billion China AI TAM would be incremental upside, as current data center forecasts exclude China revenues. Management's guidance around Blackwell execution and the de-risked China outlook alleviates investor concerns that had restrained the stock over the past year. With the GB200 NVL systems fully ramping and strong cloud and enterprise interest, Nvidia's positioning in the ongoing AI wave appears reinforced even as macro uncertainties persist. Investors should care because these developments validate Nvidia's roadmap and could drive upside to consensus estimates, especially if sovereign commitments and China re-entry accelerate. Also, from the chart we can see that consensus estimates point to over a 20% bump from its current price. In fact, the GF value is at $273, which is an enormous upside from current levels. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
an hour ago
- Yahoo
Verint Systems Jumps 20% on Q1 AI-Driven Beat
Verint Systems (NASDAQ:VRNT) surges 20% premarket after reporting Q1 fiscal 2026 revenue of $208.1 million, down 6% year-over-year but topping consensus by $13.88 million, and non-GAAP diluted EPS of $0.29, which beat estimates by $0.06. Warning! GuruFocus has detected 3 Warning Sign with VRNT. Annual recurring revenue (ARR) growth accelerated to 6% YoY as customers increasingly adopt Verint's AI-powered customer experience suite, underscoring a shift from legacy offerings to cloud-based services. These results highlight sustained AI momentum even as broader software spending faces headwinds. CEO Dan Bodner said Verint's hybrid cloud model accelerates AI deployment, allowing enterprises to rapidly implement new automation and analytics capabilities across customer interactions. We kicked off the year strong, expect our AI momentum to continue and are targeting exiting the year with 8% ARR growth and double-digit free cash flow growth, Bodner said. CFO Grant Highlander added that the revenue upside primarily reflected the timing of two large, unbundled SaaS deals and affirmed that full-year guidance remains unchanged despite the deal timing lift. With peers like NICE (NICE) and Genesys (GENESYS) also investing heavily in AI, Verint's Q1 performance stands out for sustaining both growth and operating margin discipline. Investors should care because the earnings beat and accelerating ARR growth demonstrate Verint's ability to leverage AI to drive sustainable revenue, insulating it against broader macro pressures. As ARR climbs and cost control sharpens operating margins, Verint appears well-positioned to gain market share as enterprises modernize contact center and customer engagement operations in an increasingly digital-first landscape. This article first appeared on GuruFocus.
Yahoo
an hour ago
- Yahoo
Americans are filing for Social Security at record rates. Here's why.
Older Americans are filing for Social Security benefits at a record rate this year, a surge that could reflect growing anxiety about the stability of the retirement system amid cutbacks under the Trump administration, experts say. The number of people claiming Social Security jumped 17% to 1.8 million this year through May compared with the same period a year ago, according to the most recent data from the Social Security Administration. For the federal fiscal year, new filings are on track to reach 4 million, up 15% from the prior fiscal year, the Urban Institute said in a new analysis of claims data. The spike in early benefits claims comes as the Trump administration has slashed jobs and made other changes at the Social Security Administration, an agency already struggling to provide services to the nearly 70 million retirees, disabled people and survivors of deceased workers who rely on the program. These developments are likely prompting the surge in new filings, as well as an increase in calls and in-person visits to Social Security offices since January, the Urban Institute said. Although Mr. Trump has vowed not to touch Social Security, his administration is has cut the agency's staffing to 50,000 workers, down from its current level of about 57,000 workers. The agency's workforce has been shrinking for years, with the AARP noting that the Social Security Administration had 63,000 workers in 2015. Even as its workforce shrinks, the Social Security Administration is serving more people, with the number of beneficiaries rising 19% from about 59 million people in 2015 to about 70 million today, its data shows. "I have attended several town halls around the country, and many people have asked if they should claim benefits early given Trump and [Elon] Musk's interference in the system," Max Richtman, president of the National Committee to Preserve Social Security and Medicare, an advocacy group for the two retirement programs, told CBS MoneyWatch. He added, "People are scared, and they're not sure what to do." To be sure, Americans have long held concerns about the stability of the Social Security system. Because the agency is paying out more in benefits than it's taking in through payroll taxes due to the nation's aging demographics, the program is currently dipping into its trust fund to pay beneficiaries. Without changes to the program, the trust fund is slated to be depleted in 2035, which will trigger a benefits cut of about 20%, the agency has forecast. An aging society Other factors could be driving the increase in early Social Security filings, the Urban Institute said. For one, the baby boomer generation is hitting "peak 65" as a record number of people hit retirement age, although that demographic shift isn't enough to entirely explain this year's surge in claims, the think tank noted. Another cause could be the Social Security Fairness Act, which provides more retirement benefits to public servants such as teachers, firefighters and police officers, and could encourage more people to file, the Urban analysis said. The Social Security Administration didn't respond to a request for comment. Frank Bisignano, the agency's new commissioner, told CBS News last month that the program will be able to provide services to beneficiaries despite the staffing cuts "through technology and process engineering." He added, "Everybody is committed to Social Security for the rest of time." The downside to claiming early The agency is receiving more early claims from higher-income Americans, especially at age 62, which is the earliest age at which a worker can start receiving their monthly Social Security benefits, the Urban Institute said. But there's a major cost to claiming at 62. While it might seem prudent to claim early if you're worried Social Security won't be around in a few years — something that experts say is extremely unlikely — the tradeoff is a permanently lower monthly benefit. People who claim Social Security benefits at 62 receive about 30% less in their monthly checks than if they wait until they turn 67, which is currently the program's full retirement age. Older Americans can collect even greater benefits if they delay filing past their full retirement age, getting an extra 24% boost to their monthly check if they wait until they turn 70. Because of that math, Richtman said his group recommends holding off on claiming, even though people might be fearful about the program's health. "Their concern is understandable. But we advise workers not to claim early out of fear, because filing for Social Security before full retirement age results in a lifetime reduction in benefits," he said. Sneak peek: Where is Jermain Charlo? Baldwin grills McMahon on unallocated funds for students, schools, approved by Congress Hegseth orders Navy to rename USNS Harvey Milk, Jeffries calls it "a complete and total disgrace"
