Shares of UnitedHealth Group (NYSE: UNH) were jumping 5.7% higher as of 11:17 a.m. ET on Tuesday after rising as much as 7.7% earlier in the day. The solid gain came after the giant healthcare company announced its 2024 first-quarter results before the market opened.
What did investors like about UnitedHealth Group’s Q1 update?
UnitedHealth Group reported Q1 revenue of $99.8 billion, up 8.6% year over year. This result topped the consensus Wall Street revenue estimate of nearly $99.3 billion.
The company posted a net loss of $1.22 billion, or $1.53 per share, in the first quarter based on generally accepted accounting principles (GAAP). This loss reflected a steep decline from the profit of $5.8 billion, or $5.95 per share, reported in the prior-year period.
However, the 2024 Q1 loss stemmed from the impact of a cyberattack on Change Healthcare, which UnitedHealth Group acquired in 2022. UnitedHealth’s Q1 adjusted earnings per share was $6.91, up from $6.26 in the same quarter last year. This adjusted earnings figure easily beat the average analysts’ estimate of $6.61.
Is UnitedHealth Group stock a buy?
I don’t think UnitedHealth Group stock is a good pick because of its Q1 numbers. However, I do view the stock as a buy for other reasons.
Most importantly, the company’s health insurance business and other healthcare units should have strong long-term growth prospects as the number of older Americans increases. I also like UnitedHealth’s valuation. Shares currently trade at a forward price-to-earnings ratio of 16 — much lower than the S&P 500‘s forward earnings multiple of nearly 20.8.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
Why UnitedHealth Group Stock Is Jumping Today was originally published by The Motley Fool