UnitedHealth Faces Securities Lawsuit Following Q1 Results and Guidance Cut

A securities class action lawsuit has been filed against UnitedHealth Group following a significant drop in its market capitalization after disappointing first-quarter financial results and lowered full-year guidance for 2025. The lawsuit targets UnitedHealth's financial statements and projections, particularly focusing on the Medicare Advantage segment, and alleges the company made misleading statements by not disclosing material information to investors.

Initially, UnitedHealth projected a full-year 2025 net earnings per share (EPS) between $28.15 and $28.65, with adjusted EPS ranging from $29.50 to $30.00. However, on April 17, 2025, the company revised this guidance downward sharply to a net EPS range of $24.65 to $25.15 and adjusted EPS between $26.00 and $26.50, citing unexpectedly high care utilization among Medicare Advantage members as the primary cause.

This revision led to a 22% drop in UnitedHealth’s stock price on the announcement date. The lawsuit also raises questions about whether UnitedHealth altered its utilization management strategies without appropriately reflecting such changes in its guidance. Legal investigators are seeking input from investors who experienced losses and whistleblowers with potential insider information. The case highlights important implications for corporate disclosure practices, utilization management oversight in Medicare Advantage, and the volatility of earnings projections in the health insurance market.