What’s in Store for UnitedHealth Group’s (UNH) Q4 Earnings?

This story originally appeared on Zacks

UnitedHealth Group Inc. The United Nations is due to announce fourth-quarter results for 2021 on January 19, before the opening bell.

– Zacks

Q4 estimates

Zacks’ earnings per share estimate is pegged at $4.30, indicating a 70.6% rise from the figure recorded in the last year’s quarter. The consensus mark for revenue is $73 billion, indicating 11.7% growth over the figure reported in the prior year quarter.

Key factors to note

Revenue from UnitedHealthcare, the largest segment of the United Nations that sells insurance, is likely to have risen as membership in community and seniors programs has increased. The United Nations service may have added members to Medicare Advantage (MA) plans, Medicaid. Strong insurance sales for dental and vision plans may have helped premium growth. The consensus score for revenue from this segment is 11.1% higher than the figure recorded in the previous quarter of last year.
In another segment called Optum, higher growth is expected to be driven by a higher contribution from its OptumHealth and Optum Insight sub-sectors. In the OptumHealth subsegment, revenue and profits are likely to have been gained from the rise in the number of people being provided in value-based care arrangements and the increased strength of affiliated physicians. Optum’s consensus estimate of revenue is 12.2% higher than the prior year quarter figure reported.
Optum Insight likely saw better revenue and earnings due to growth in services and technology offerings, and improved productivity.
New business gains, contract extensions and pipeline growth in overall managed services are expected to boost the top streak. Zacks’ consensus estimate for Optum Insight’s revenue is 11.5% higher than last year’s quarter.
The operating cost ratio, which measures expenses incurred in proportion to revenue, is likely to have declined after the abolition of the health insurance tax and continued operating efficiency gains. This, in turn, is likely to have been partially offset by the business mix and extensive investment in growth and innovation.
The UN final result is expected to reflect the net unfavorable impact of COVID-19 testing and treatment costs. UnitedHealth may have faced a higher level of expenses due to higher medical and operating costs.

Earnings surprise date

UnitedHealth takes pride in its impressive history of making profits. The final result beat its estimates in each of the subsequent four quarters, with an average of 8.66%.
This is illustrated in the chart below:

What our quantitative model predicts

Zacks’ proven model doesn’t conclusively predict a profit win for UnitedHealth this time around. Combining a Positive Earnings ESP and Zacks rank #1 (strong buy), 2 (buy) or 3 (hold) increases your odds of making a profit. But that is not the case here.
ESP earnings: UnitedHealth has an ESP of 0.00%. You can detect the best stocks to buy or sell before they are reported with the ESP earnings filter.
Zacks Rank: UnitedHealth currently holds a Zacks #3 rating. you can see The full list of Zacks #1 stocks today is here.

stock to consider

Some of the stocks worth looking at from the medical space with the perfect mix of items to overshoot estimates in upcoming quarterly issues are as follows:
Teladoc Health, Inc. TDOC has an ESP earnings of +5.97% and is rated Zacks #3 at the moment.
HCA Healthcare, Inc. HCA is currently the #3 player in the rankings and has an ESP of earnings of +1.21%.
Tenet Healthcare Corporation THC has an ESP of +0.96% and a Zacks rank of 3, currently.

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