UnitedHealth (NYSE:UNH) stock is trending this morning on news that the insurer expects a previous cyberattack to cost more than it had previously forecast. However, the firm’s quarterly profits did come in above analysts’ average estimate. UnitedHealth also reiterated its full-year adjusted EPS guidance.
UNH stock is currently up more than 4% today as investors digest the news.
UNH Stock and Higher Cyberattack Costs
Back in February, UnitedHealth tech division Change Healthcare was hit by a cyberattack that temporarily damaged its payment system. As a result, UnitedHealth had to give its partners more than $9 billion of loans. The insurer now estimates that the incident will lower its EPS by between $1.90 and $2.05 in 2024 versus the previous outlook for a $1.15 to $1.35 per-share hit.
Partly due to the cyberattack, the percentage of premiums that the firm spent on medical care also rose almost two percentage points in the second quarter versus the same period a year earlier, climbing to 85.1%.
Previously, UnitedHealth reported that the hackers likely obtained a significant amount of information during the attack. Yesterday, however, the firm noted that it had “restored the majority of the affected Change Healthcare services.”
Q2 Results
The firm noted that the UnitedHealth cyberattack had reduced its EPS by 92 cents last quarter. However, the company reported adjusted Q2 EPS of $6.80, meaningfully above analysts’ mean estimate of $6.66 per share. The adjusted EPS figure excludes one-time costs caused by the cyberattack.
The insurer also noted that its Q2 revenue increased 6.4% year-over-year (YOY) to $98.86 billion. That also came in slightly above analysts’ mean outlook.
Finally, UnitedHealth reiterated its full-year adjusted EPS outlook of between $27.50 and $28 per share.
Valuation and Price Action
UNH stock now has a forward price-to-earnings (P/E) ratio of 18.5 times and a price-to-sales (P/S) ratio of 1.27 times. As of this writing, shares have climbed 5% in the previous six months and are up just 1% so far in 2024.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
