Is UnitedHealth Group Incorporated (UNH) overvalued?
On Equity Rank's model estimate, UNH trades 37% above its fair value. UnitedHealth Group Incorporated (UNH) last closed at $394.15; the multi-method model fair value is $286.84.
| Price | Model fair value | Price vs model |
|---|---|---|
| $394.15 | $286.84 | 37% above |
What the answer rests on
- 2 of 12 valuation methods put UNH's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, UNH's free cash flow would need to grow about 2.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -11.8% a year.
- UNH trades at 23.4 times its last year's earnings, against a median of 39.8 for 14 profitable Managed Care companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 13% above to 58% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind UNH's fair value · What prices assume · Other companies