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Forbes
42 minutes ago
- Forbes
UnitedHealth Stock Is Being Dumped By Wall Street—Here's Why
UnitedHealth stock is being offloaded. It just reported billions in profit. Earnings were strong. The story sounded stable. Yet the stock has been sinking. It's trading near multi-year lows, underperforming peers, and reacting poorly to every quarterly release. The market doesn't move like this for nothing. Markets often sniff out risks long before they're made official. The headlines are piling up: government investigations, operational failures, and leadership questions, but the price has already started to discount something deeper. Investors are trained to react to numbers. But when structure breaks, the numbers are often the last to go. This isn't about a soft quarter. The model itself is cracking, and the market sees it. The way UnitedHealth generates earnings, the incentives behind its vertical integration, and the regulatory heat all point to fragility that isn't captured in consensus spreadsheets. The market is whispering what many investors don't want to admit: that something is changing here. And once trust fades, the re-rating isn't temporary. It's structural. UnitedHealth Stock: Big, Profitable, Misunderstood UnitedHealth trades with a market value of about $226 billion, against $400 billion in revenue for 2024, with 2025 revenue expected to reach mid‑$445 billion to $448 billion. Size doesn't really equal a safe company; it often hides the fragility beneath. Most investors can't describe how the business works. They see adjusted EPS. They don't question the mechanics. They assume that anything producing this much cash must be built to last. But what looks durable can rot from the inside. The core of UnitedHealth's engine is vertical integration. Optum decides on care, delivers it, and pays itself. One hand washes the other, all under the same roof. It's efficient when unexamined. But regulators are finally paying attention. When the payer, provider, and data all sit in one unit, it becomes harder to separate health outcomes from billing outcomes. Investors often mistake size for insulation. But complexity cuts both ways. When that model starts to wobble, through government probes, whistleblower claims, or unexplained earnings distortions, it doesn't usually collapse overnight. It slowly leaks. This is what we are witnessing. The price action is the tell. This isn't about sentiment anymore. It's about what the market now knows; the market no longer trusts what it thought it understood. You can see it is undone. Slowly at this point. But it's picking up. UnitedHealth Is In The Crosshairs Of The Regulators The Department of Justice now runs both criminal and civil investigations into UnitedHealth's Medicare Advantage billing, officially confirmed on July 24, 2025. Washington is targeting diagnostic coding and risk adjustment practices tied to higher payouts. A process investigators say may have involved pressure, bonuses, and algorithmic recommendations to staff for certain lucrative diagnoses. At the center is Optum, UnitedHealth's massive care delivery and analytics arm, which assigns diagnoses, delivers services, and influences payer reimbursement. That vertical structure underpinned margin expansion until it became a regulatory vulnerability. Congress and CMS are now eyeing those same incentives for bundled services that may prioritize profit over care. And according to multiple reports, lawmakers are drafting reforms to Medicare Advantage to clamp down on what they see as systemic abuse. This is more than a compliance issue. If enforcement leads to fines or limits on Optum's ability to steer claims, UnitedHealth loses both margin and narrative. The company disclosed a potential settlement cost of $1.6 billion tied specifically to these investigations. For investors, this isn't a question of past performance but future structure. If Washington forces a redesign in how payer, provider, and auditor relationships operate within Optum, valuation multiples change. You won't see regulatory risk on a spreadsheet. It's not in the line items. But it's in every fund manager's head. And the market is already pricing that doubt. Earnings Vs. Trust UnitedHealth keeps beating the numbers. But the market's not cheering anymore, and that should make investors stop to think. Second‑quarter 2025 adjusted EPS came in at $4.08, while GAAP net earnings per share were about $3.74, reflecting a 9‑10% spread. This isn't a one-off. The company has leaned on adjustments for several quarters, removing charges from cyberattacks, restructuring, litigation, and 'normalizing' expense items. Each quarter it gets harder to square the adjusted reality with the actual income statement. Investors have tolerated this because the stock used to respond. Now, even beats fall flat. The post-earnings reaction in July was strong, with headline numbers, and yet shares sank over 4%. It's not the earnings they're questioning. It's the whole premise. When the market no longer trusts the adjustment logic, the premium unwinds. At some point, 'adjusted' starts sounding like wishful thinking. That's a dangerous pivot for a stock that trades on perceived consistency. The issue here is credibility. And when credibility gets questioned in a complex, vertically integrated healthcare giant with active DOJ probes and massive opacity in its internal operations, the path forward narrows quickly. UnitedHealth's numbers still impress. But the market is no longer listening to the numbers alone. It's watching what they're trying to cover. Optum: The Black Box That Powered Growth At UnitedHealth For years, Optum was UnitedHealth's crown jewel. It gave the company vertical integration that most healthcare giants could only dream of. Run the insurer. Own the doctor's office. Control the pharmacy benefit manager. Route the claims. Capture every step of the dollar. Investors praised it as genius. Until now. Optum was built for margin expansion. By combining payer and provider, UnitedHealth collapsed the value chain into itself. But that same structure is now drawing fire. Regulators are asking whether a company can truly manage care outcomes and approve and profit from the services being recommended. This questions their entire integration strategy. What used to be pitched as 'scale and efficiency' now looks like opacity. Good luck getting through an Optum report without needing aspirin halfway. It's all intentional. In a market that once rewarded complexity, investors are shifting toward simplicity and transparency. Optum is the opposite. Here's the rub: the more essential Optum is to UnitedHealth's story, the more exposed the company becomes to scrutiny. Break the chain or just shake investor faith in it and the premium vanishes. Optum was once the crown jewel. Now it's the bullseye. The Cyberattack Was A Wake-Up Call At UnitedHealth When Change Healthcare, an Optum subsidiary, was hit by a massive ransomware attack earlier this year, most investors treated it as a one-off disruption. It wasn't. It was a systemic failure that revealed how fragile UnitedHealth's infrastructure had become and how slow its leadership was to respond. The breach paralyzed billing and claims systems for weeks across the U.S. healthcare network. Providers couldn't get paid. Pharmacies stalled. Patients were caught in the middle. For a company that sells itself on reliability and integration, the collapse of a core system fully exposed them to operational risk. But the real damage was reputational. CEO Andrew Witty's delayed response and lack of transparency during the fallout shook investor confidence. For a business model that depends on centralized control, a failure of this scale felt like the opposite of control. The market didn't punish the stock immediately, but the tone shifted. Since the hack, UnitedHealth stock has lagged peers, failed to respond to buybacks, and sold off post-earnings despite beats, indicating trust erosion. In healthcare, operational execution is the product. And the cyberattack told the market what the earnings couldn't: UnitedHealth may be bigger than ever, but its foundation isn't as solid as the numbers suggest. Defensive Stocks Are No Longer Safe Havens Investors once treated UnitedHealth like a bond proxy. It was dependable, defensive, and cash-rich, perfect in a zero-rate world, but the world has moved on. And the assumptions that supported its premium are unraveling with it. But investors have moved on. Higher rates change everything. Safety no longer commands a valuation premium. If anything, it draws sharper scrutiny. Now, capital seeks efficiency and flexibility. It rotates out of perceived stability the moment cracks appear. That's exactly what's happening with UnitedHealth. It's mainly about multiples. Stocks like UnitedHealth were priced on the assumption that growth would stay steady, margins wouldn't come under pressure, and regulators would remain passive. That's no longer the case. Every part of the thesis, from Medicare Advantage economics to Optum's integration, is under review. And the old multiple doesn't hold under new conditions. At 9 to 10 times forward earnings, UnitedHealth stock is still priced for control. But what happens if growth slows, scrutiny increases, and earnings quality erodes? That multiple doesn't hold when earnings wobble and faith erodes. And that's what we're starting to see. The idea that defensive means safe no longer applies. In a world where capital costs more and scrutiny cuts deeper, structural risk matters more than past predictability. And UnitedHealth is showing investors what happens when they confuse size for safety. Market Behavior Is Telling
CNN
2 hours ago
- CNN
TikTok pulls video of Huda Kattan after beauty mogul spreads conspiracy theories
TikTok this week removed an inflammatory anti-Israel video posted by celebrity beauty mogul and influencer Huda Kattan. Kattan, the founder and face of the billion-dollar brand Huda Beauty, shared a video to her more than 11 million followers on TikTok, accusing Israel of orchestrating World War I, World War II, the September 11 terrorist attacks and Hamas' attack on Israel on October 7. World War I (1914-1918) and World War II (1939-1945) both occurred before the State of Israel was established in 1948. 'All of the conspiracy theories coming out and a lot of evidence behind them — that Israel has been behind World War I, World War II, September 11, October 7 — they allowed all of this stuff to happen. Is this crazy?' Kattan said on camera in her since-removed TikTok post, which included other unfounded claims about Israel. 'Like, I had a feeling — I was like, 'Are they behind every world war?' Yes.' A representative for TikTok confirmed to CNN that it removed Kattan's video for violating its community guidelines. 'In a global community, it is natural for people to have different opinions, but we seek to operate on a shared set of facts and reality,' TikTok's community guidelines state. 'We do not allow misinformation that may cause significant harm to individuals or society, regardless of intent.' Kattan's agency did not respond to CNN's request for comment. A manager listed on public databases as a representative for Kattan was contacted by CNN and said in an email that they no longer represent her. Kattan's video has spurred calls across social media and among Jewish groups for retailers like Sephora to cut ties with her popular beauty brand, Huda Beauty, which was valued at $1.2 billion in 2017 and brings in roughly $200 million in annual sales, according to Forbes. A representative for Sephora has not responded to CNN's request for comment. This is not the first time the beauty influencer has faced calls for boycotts due to her public commentary after October 7. Kattan, whose company has over 57 million followers on Instagram, has been an outspoken critic of Israel and a staunch supporter of Palestinians in Gaza. Within a week of Hamas attacking Israel on October 7, 2023, an Israeli Instagram user threatened to boycott her products, to which Kattan replied: 'I don't want blood money.' In response to that comment, a petition was launched and received over 30,000 signatures, calling on Sephora to remove Huda Beauty products from its stores. Kattan's most recent TikTok video drew swift backlash from Jewish groups. 'Huda Kattan built a brand around beauty — but these antisemitic conspiracy theories are nothing short of ugly hate,' said Jonathan Greenblatt, CEO of the Anti-Defamation League. 'Spreading vile myths about Jews to millions of followers isn't just reckless — it's dangerous.' The American Jewish Committee posted Kattan's since-removed TikTok video on social media, writing, 'Huda Kattan, founder of Huda Beauty, is using her massive platform to spread vile antisemitic conspiracy theories — accusing Jews of harvesting the organs of Palestinians, causing 9/11, and running global pedophile rings. This isn't 'criticism of Israel.' It's centuries-old hate, repackaged and broadcast to millions.' 'Retailers have a choice,' said Ari Hoffnung, managing director of the Jewish nonprofit, JLens. 'They can continue to platform a brand whose founder promotes hate-fueled conspiracy theories, or they can take a stand against antisemitism.' Forbes included Kattan on their 2023 list of America's Richest Self-Made Women and on their list of Most Powerful Women in Business in 2024.
CNN
2 hours ago
- CNN
TikTok pulls video of Huda Kattan after beauty mogul spreads conspiracy theories
TikTok this week removed an inflammatory anti-Israel video posted by celebrity beauty mogul and influencer Huda Kattan. Kattan, the founder and face of the billion-dollar brand Huda Beauty, shared a video to her more than 11 million followers on TikTok, accusing Israel of orchestrating World War I, World War II, the September 11 terrorist attacks and Hamas' attack on Israel on October 7. World War I (1914-1918) and World War II (1939-1945) both occurred before the State of Israel was established in 1948. 'All of the conspiracy theories coming out and a lot of evidence behind them — that Israel has been behind World War I, World War II, September 11, October 7 — they allowed all of this stuff to happen. Is this crazy?' Kattan said on camera in her since-removed TikTok post, which included other unfounded claims about Israel. 'Like, I had a feeling — I was like, 'Are they behind every world war?' Yes.' A representative for TikTok confirmed to CNN that it removed Kattan's video for violating its community guidelines. 'In a global community, it is natural for people to have different opinions, but we seek to operate on a shared set of facts and reality,' TikTok's community guidelines state. 'We do not allow misinformation that may cause significant harm to individuals or society, regardless of intent.' Kattan's agency did not respond to CNN's request for comment. A manager listed on public databases as a representative for Kattan was contacted by CNN and said in an email that they no longer represent her. Kattan's video has spurred calls across social media and among Jewish groups for retailers like Sephora to cut ties with her popular beauty brand, Huda Beauty, which was valued at $1.2 billion in 2017 and brings in roughly $200 million in annual sales, according to Forbes. A representative for Sephora has not responded to CNN's request for comment. This is not the first time the beauty influencer has faced calls for boycotts due to her public commentary after October 7. Kattan, whose company has over 57 million followers on Instagram, has been an outspoken critic of Israel and a staunch supporter of Palestinians in Gaza. Within a week of Hamas attacking Israel on October 7, 2023, an Israeli Instagram user threatened to boycott her products, to which Kattan replied: 'I don't want blood money.' In response to that comment, a petition was launched and received over 30,000 signatures, calling on Sephora to remove Huda Beauty products from its stores. Kattan's most recent TikTok video drew swift backlash from Jewish groups. 'Huda Kattan built a brand around beauty — but these antisemitic conspiracy theories are nothing short of ugly hate,' said Jonathan Greenblatt, CEO of the Anti-Defamation League. 'Spreading vile myths about Jews to millions of followers isn't just reckless — it's dangerous.' The American Jewish Committee posted Kattan's since-removed TikTok video on social media, writing, 'Huda Kattan, founder of Huda Beauty, is using her massive platform to spread vile antisemitic conspiracy theories — accusing Jews of harvesting the organs of Palestinians, causing 9/11, and running global pedophile rings. This isn't 'criticism of Israel.' It's centuries-old hate, repackaged and broadcast to millions.' 'Retailers have a choice,' said Ari Hoffnung, managing director of the Jewish nonprofit, JLens. 'They can continue to platform a brand whose founder promotes hate-fueled conspiracy theories, or they can take a stand against antisemitism.' Forbes included Kattan on their 2023 list of America's Richest Self-Made Women and on their list of Most Powerful Women in Business in 2024.
