Is UnitedHealth Group Inc. (UNH) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Healthcare sector peers in our coverage

31% Discount TTM fundamentals · sector averages from covered peers

UNH trades at 20.3× TTM earnings — a 31% discount to its Healthcare sector average of 29.6× in our coverage.

The Numbers

P/E (TTM)

20.3×

Sector avg: 29.6×

P/S (TTM)

0.8×

Sector avg: 8.2×

Market Cap

$352.89B

EPS (TTM): $19.19

Revenue (TTM)

$435.16B

Net income: $18.37B

Healthcare Peer Comparison

How UNH's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock	Price	P/E (TTM)	P/S (TTM)	Market Cap
UNH This page	$389.57	20.3×	0.8×	$352.89B
LLY Eli Lilly and Company	$1158.70	56.7×	17.5×	$1.04T
JNJ Johnson & Johnson	$265.83	25.7×	7.0×	$640.46B
MRK Merck & Co. Inc.	$147.86	19.5×	5.7×	$366.99B
PFE Pfizer Inc.	$28.47	16.6×	2.6×	$161.87B

Is the Discount Justified?

August 9, 2026

UnitedHealth Group Inc. (UNH) trades at a P/E multiple of 21.2x, which is below the Healthcare sector average of 27.4x. This discount may reflect ongoing concerns regarding medical cost trends and regulatory scrutiny. However, the company recently reported strong second-quarter 2026 results, with net profit reaching $5.48 billion and adjusted EPS significantly exceeding Wall Street forecasts. This performance was driven by an improved medical cost ratio, which fell to 86.7%, and a robust turnaround in its Optum health services business, where operating income increased by 29%. Consequently, UnitedHealth raised its 2026 profit forecast. While the company is making strategic investments in AI and modernization, it continues to navigate elevated medical cost trends in commercial segments and federal reviews of its Medicare billing practices, which remain key considerations for investors.

Sources

Frequently Asked Questions

Is UNH overvalued or undervalued?

On trailing-twelve-month earnings, UNH trades at 20.3x versus a Healthcare sector average of 29.6x in our coverage — a 31.4% discount. Whether that's justified depends on growth, margins, and risk; see the context above.

What does the P/E ratio tell you?

Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.

Why compare against the sector average?

Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing UNH with its own Healthcare peers is more informative than comparing against the whole market.

Is a cheap stock automatically a good buy?

No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Healthcare names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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PFE JNJ MRK LLY ABBV