DCF Studio

    UNH · NYQ · Healthcare

    UnitedHealth Group Incorporated

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 529.77

    Market price

    USD 400.44

    Implied upside

    +32.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.86% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.03% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 529.77+32.3%
    Exit multiple
    USD 661.75+65.3%
    Market price
    USD 400.44

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn15bn30bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 449.1bnUSD 463.1bnUSD 477.2bnUSD 491.3bnUSD 505.5bnUSD 519.7bnUSD 533.9bnUSD 548.1bnUSD 562.2bnUSD 576.3bn+2.8%
    EBITUSD 33.4bnUSD 34.5bnUSD 35.5bnUSD 36.6bnUSD 37.6bnUSD 38.7bnUSD 39.8bnUSD 40.8bnUSD 41.9bnUSD 42.9bn+2.8%
    NOPATUSD 26.4bnUSD 27.2bnUSD 28.1bnUSD 28.9bnUSD 29.7bnUSD 30.6bnUSD 31.4bnUSD 32.2bnUSD 33.1bnUSD 33.9bn+2.8%
    Add depreciation & amortisationUSD 4.6bnUSD 4.8bnUSD 4.9bnUSD 5.1bnUSD 5.2bnUSD 5.3bnUSD 5.5bnUSD 5.6bnUSD 5.8bnUSD 5.9bn+2.8%
    Less capital expenditureUSD -4.6bnUSD -5.2bnUSD -5.9bnUSD -6.6bnUSD -7.3bnUSD -8.0bnUSD -8.8bnUSD -9.6bnUSD -10.4bnUSD -11.3bn+10.4%
    Capex, % of revenue1.0%1.1%1.2%1.3%1.4%1.5%1.6%1.8%1.9%2.0%-
    Less increase in working capitalUSD 180.8mUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bn-28.0%
    Free cashflow to firmUSD 26.6bnUSD 28.4bnUSD 28.7bnUSD 29.0bnUSD 29.3bnUSD 29.6bnUSD 29.8bnUSD 30.0bnUSD 30.1bnUSD 30.2bn+1.4%
    Discount factor0.96590.90130.84090.78460.73210.68310.63730.59470.55480.5177-
    Present valueUSD 25.7bnUSD 25.6bnUSD 24.2bnUSD 22.8bnUSD 21.5bnUSD 20.2bnUSD 19.0bnUSD 17.8bnUSD 16.7bnUSD 15.6bn-
    Present Value Of The ForecastUSD 209.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.678Reported 0.520, pulled toward 1.0 (Blume)
    Cost of equity7.76%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.7x interest cover. Book interest / average debt was lower, at 5.2%.
    Market capitalisationUSD 359.4bn82.1% of capital
    Total debtUSD 78.4bn17.9% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.18%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 529.77

    61% of EV

    Forecast FCFF, final year
    USD 30.2bn
    Capex at depreciation, working capital in reinvestment
    USD 33.9bn
    Less reinvestment at g/ROIC (15.8% of NOPAT)
    USD -5.4bn
    Capitalised
    USD 28.5bn
    ROIC (reported)
    15.8%
    Terminal value, undiscounted
    USD 625.6bn
    Terminal value, discounted
    USD 323.8bn
    Enterprise value
    USD 532.9bn
    Less net debt
    USD 50.3bn
    Equity value
    USD 482.6bn

    Exit at 17.6x EBITDA

    Value per shareUSD 661.75

    68% of EV

    Terminal value, undiscounted
    USD 857.8bn
    Terminal value, discounted
    USD 444.1bn
    Enterprise value
    USD 653.1bn
    Less net debt
    USD 50.3bn
    Equity value
    USD 602.9bn

    Spread between methods: 22%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.18%778.58845.21937.931074.701294.96
    6.18%605.32637.22678.61733.98811.14
    7.18%492.92509.29529.77555.82589.72
    8.18%414.06422.56433.04446.05462.41
    9.18%355.63359.83365.03371.48379.52

    Outlined: this model. Green text: above today's price of 400.44. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year11.4%2.6%-0.1%
    EBIT margin8.8%7.4%5.8%
    Discount rate-7.2%8.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.