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Happy Sunday.
What an interesting few days for UnitedHealth Group!
UnitedHealth Group is the largest healthcare provider in America by revenue, with 2024 figures coming in at over $400B. For the last 15 years, the company has been growing their earning per share (EPS) at an average compounded annual rate of +13.5%.
Earlier this week it was announced that the Department of Justice is conducting an investigation into the company for Medicare Fraud — specifically for exaggerating diagnoses for patients, allowing the company to bill Medicare (the government) a higher amount than they’re legally allowed to. The company then surprised investors by pulling their guidance and announcing a new CEO on May 13 — causing their stock to plummet. Then it was reported that insiders, including their CEO, had bought ~$30M of company stock after the drop.
Remember, people sell their stock for any number of reasons — but they buy stock for only one reason. They believe the price will go up.
With that being said, their stock is now trading at valuations we haven’t seen since the Great Financial Crisis (11X P/E). This seems like an incredible opportunity to buy a cash flowing monster at a depressed valuation. On the flip side, their stock might not recover for years depending on the conclusion of the investigation. We revisit their quarterly earnings figures from April 17 below.
Let’s dig in!
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Portfolio Updates (YTD Performance):
The stock section of my portfolio is officially up +6.6% year-to-date, compared to the Nasdaq-100’s +2.2% and S&P 500’s +1.3%. Woohoo! I’d argue the recent outperformance was catalyzed by both names in my “Long Risky” and “Long Technology” subsections experiencing continued relief as the market rallies higher.
For example, Tesla is now only down -7% YTD compared to -41% during mid-April. I continue to remain very bullish on the company — especially after seeing this video of their Optimus robot. Additionally, Google’s CEO shared during a recent interview that we’re 2-3 years from a “magical moment” with humanoid robots. Reminder: have some exposure to this asset class via Tesla, Google, Nvidia, and others!
Bitcoin is still rocking and rolling. Crazy to reflect upon gains like this in only two years time. No changes here. Ignore the $1,425 ETH position, this is something I had laying around from years ago. The real ETH position (20 ETH) is sitting on a different wallet. Nothing new to report for that either.
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Week in Review — TLDR:
UnitedHealth Group suspended guidance an announced a new CEO, Monday.com delivered record free cash flow, and Walmart’s eCommerce business turned profitable.
Trump has had a successful world tour, Moody’s downgraded US credit for the first time ever, Coinbase had a cyber attack that could cost them $400M, UnitedHealth just gave us quite the buying opportunity, inflation data for both consumers and producers were loved by the market, and retail sales are going through some tariff growing pains.
Key Earnings Announcements:
UnitedHealth Group suspended guidance an announced a new CEO, Monday.com delivered record free cash flow, and Walmart’s eCommerce business turned profitable.
UnitedHealth Group (UNH)
Key Metrics
Revenue: $109.5 billion, an increase of +10% YoY
Operating Income: $9.2 billion, an increase of +15% YoY
Profits: $6.5 billion, compared to -$1.2 billion last year
Earnings Release Callout (April 17)
“UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings growth rate target of 13 to 16%."
My Takeaway
UNH announced that CEO Andrew Witty will be stepping down for personal reasons and will be immediately replaced by current chairman (and previous CEO) Stephen Hemsley. The company also announced a suspension of their 2025 guidance / outlook due to a negative acceleration in Medicare Advantage trends (having to provide care to worse and worse patients therefore increasing their total spend), conservative expectations around positive trend in other products, and a negative impact from new Medicare Advantage members.
According to the company, they’re still expecting a return to profit growth in 2026 driven by a conservative approach toward next month’s Medicare Advantage bids — which are expected to return the company to target margins (5-6%) sometime during 2026. Despite management pulling guidance this week, Wall Street is modeling for 2025 profits to decrease by -10% to -20%.
Wall Street’s 2025 earnings-per-share (EPS) estimates sit around $22.00, down from the $26.50 they were expecting as we started the year (and after UNH reported earnings mid-April). 2026 EPS expectations now sit around $25.00, down from $30.00. As the stock trades today, their P/E ratio against that $25.00 in EPS expectations for 2026 is roughly 11.6X — the lowest it has been since the Great Financial Crisis. In my humble opinion, this seems like a long-term buying opportunity. If you believe by the end of the decade the company will be able to right the ship by increasing their Medicare Advantage margins and lowering their cost of care by implementing value-based solutions — it’s game time!
Assuming a consistent 10% compounded annual growth rate of their EPS for the next 4 years (alongside a multiple expansion back to their long-term average of 18X P/E), this stock could be trading at $650-700 / share by 2030 — representing +135% upside from current levels.
Holding shares.
Monday.com (MNDY)
Key Metrics
Revenue: $282.3 million, an increase of +30% YoY
Operating Income: $9.8 million, compared to -$5.0 million last year
Profits: $27.4 million, an increase of +286% YoY
Earnings Release Callout
“We are thrilled to report an outstanding start to 2025, highlighted by strong revenue growth in the first quarter, record operating profit, and our highest-ever adjusted free cash flow for a single quarter. As we continue to invest in innovation, including the launch of new enterprise work management capabilities and AI-powered features, we are confident in our ability to execute our strategy and capitalize on the significant growth opportunities before us.”
My Takeaway
The company that just keeps on giving! As you all know, I’ve been a long-term believer in Monday.com with an average price per share of only $183. Their stock price is up +25% YTD compared to the Nasdaq-100’s +2% — and I have a funny feeling it’ll continue to outperform the index during 2025!
A few quick hits for you — revenue grew by +30%, GAAP operating income was positive $9.8M compared to negative -$5.0M last year, non-GAAP operating income increased +90% to $40.8M, non-GAAP operating margin climbed to 14% compared to 10% last year, and their adj. free cash flow grew +22% to $109.5M. Wonderful results!
Additionally, their number of paid customers with more than $50K and $100K of annual recurring revenue grew by +38% and +46%, respectively. During their earnings call their management team stated they’re not currently experiencing business headwinds from the ever-changing macro environment, but they did communicate the macro environment has created a more conservative guidance for the rest of 2025.
With core strategic initiatives trending in a positive direction, paired with strong revenue growth and a healthy free cash flow margin — I firmly believe the company will deliver upon the “Rule of 40” and beyond during 2025. Wall Street’s price target of $340 / share sounds good to me!
Holding shares.
Walmart (WMT)
Key Metrics
Revenue: $165.6 billion, an increase of +2% YoY
Operating Income: $7.1 billion, an increase of +4% YoY
Profits: $4.5 billion, compared to $5.1 billion last year
Earnings Release Callout
“We delivered a solid first quarter in a dynamic operating environment. We’re serving customers and members in more ways, which is fueling our growth. We’re well positioned, maintaining flexibility to navigate the nearterm while continuing to invest to create value for the long-term.”
My Takeaway
Wall Street remains increasing bullish on the company following their quarterly results. The quarter came in ahead of expectations, and their full-year guidance was reiterated despite heightened macro and tariff-related uncertainty. While the environment remains fluid, Wall Street continues to believe Walmart is uniquely positioned to navigate it — supported by diversified sourcing, replenish-able assortment of goods, disciplined inventory planning, and a structurally advantaged model across their eCommerce and supply chain.
The company continues to lean into high-margin revenue streams, such as advertising (up +50% YoY), membership (up +15% YoY), and marketplace — all delivering strong growth and expanding contributions to their bottom line. Additionally, eCommerce turned profitable in the US and globally for the first time — a key milestone that supports long-term EBIT margin expansion.
Tariffs remain an overhand for retail broadly, but Wall Street believes Walmart’s scale, agility, and pricing strategy as key differentiators. Long-term Wall Street expects Walmart to deliver operating leverage — supporting stock price appreciation.
No shares at the moment.
Investor Events / Global Affairs:
Trump has had a successful world tour, Moody’s downgraded US credit for the first time ever, Coinbase had a cyber attack that could cost them $400M, and UnitedHealth just gave us quite a buying opportunity.
Trump’s World Tour Leads to Trillions of Investments
Source: Alex Brandon / AP
During his recent Middle East tour, President Donald Trump secured substantial investment commitments from Gulf nations, totaling over $3 trillion.
The United Arab Emirates pledged to invest $1.4 trillion in the United States over the next decade, focusing on sectors like artificial intelligence, energy, and manufacturing. In Qatar, Trump finalized agreements amounting to $1.2 trillion in economic exchanges, which include a historic $96 billion Boeing aircraft order and other significant trade and defense deals. Saudi Arabia committed to a $600 billion investment in the U.S. over the next four years, encompassing major defense contracts and initiatives in energy and technology.
While these announcements have been lauded as transformative, some analysts express skepticism about the feasibility and actualization of these multitrillion-dollar commitments. Nonetheless, the tour underscores the Trump administration's emphasis on strengthening economic ties with key Middle Eastern allies.
“We appreciate President Trump and Crown Prince Mohammed bin Salman convening business leaders in Saudi Arabia to strengthen economic ties and drive innovation between our two countries. Amazon is excited to partner with HUMAIN, Saudi Arabia’s newly created AI innovation company, to collectively invest more than $5 billion to build a groundbreaking ‘AI Zone’ there, which will bring multiple innovative AWS AI capabilities to Saudi Arabia along with skills training for 100,000 citizens from the Kingdom.”
“In support of President Trump’s vision and commitment to peace through prosperity and the Abraham Accords, the greatest diplomatic accomplishment in modern history, we are pleased to continue to invest in and deliver cloud and AI technology to power the UAE’s most important systems. Our Oracle Cloud Infrastructure footprint, Oracle Alloy sovereign cloud partnerships, and groundbreaking work in healthcare will help accelerate the UAE’s technology modernization efforts and advance patient health outcomes. Together, the UAE and U.S. will redefine what is possible in technology, business, and healthcare.”
Moody’s Downgrades US Credit for First Time Ever
Moody’s downgraded the U.S. credit rating from Aaa to Aa1, removing the country's last top-tier rating and citing unsustainable fiscal deficits and rising debt levels.
The federal budget deficit is nearing $2 trillion annually — over 6% of GDP — and total debt has now exceeded the size of the U.S. economy. The downgrade followed a year of negative outlook and comes as lawmakers work on a $3.8 trillion tax-and-spending bill that could add trillions more to the debt.
The market reaction was swift: 10-year Treasury yields rose to 4.49%, and S&P 500 futures dropped -0.6%. Moody’s warned that deficits could reach 9% of GDP by 2035 due to increased interest payments and entitlement spending. The White House criticized the move as politically motivated, while Treasury Secretary Scott Bessent admitted the U.S. is on a "scary" debt path that could trigger a credit crisis if left unchecked.
“While we recognize the US’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics… Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.”
Coinbase (COIN) $400M Cyber Attack
Source: Reuters
Coinbase revealed that hackers bribed overseas support agents to steal sensitive customer data in a targeted social engineering scheme that could cost up to $400M.
The breach exposed information including names, addresses, phone numbers, partial Social Security numbers, government ID images, and account balances. Passwords, private keys, and funds were not compromised. The attackers demanded a $20 million ransom to avoid releasing the data publicly, but Coinbase has refused to pay and is cooperating with law enforcement. The company has terminated the rogue employees involved.
Coinbase is offering a $20 million reward for information leading to the arrest and conviction of the perpetrators. Despite the breach, Coinbase recently announced a global expansion effort and will soon join the S&P 500 index.
Coinbase (COIN) Stock Performance, All-Time Chart, Seeking Alpha
“Cyber criminals bribed and recruited a group of rogue overseas support agents to steal Coinbase customer data to facilitate social engineering attacks. These insiders abused their access to customer support systems to steal the account data for a small subset of customers. No passwords, private keys, or funds were exposed and Coinbase Prime accounts are untouched. We will reimburse customers who were tricked into sending funds to the attacker.”
UnitedHealth (UNH) Tanks Due to Federal Investigation
Source: Modern Health
The Justice Department is conducting a criminal investigation into UnitedHealth Group over potential Medicare fraud tied to its Medicare Advantage program.
This adds to several ongoing government inquiries, including antitrust and civil investigations into its billing practices. UnitedHealth denies any wrongdoing, stating it has not been notified of the criminal probe and stands by the integrity of its operations.
The investigation comes amid a broader government crackdown on Medicare Advantage fraud and follows a period of turmoil for UnitedHealth, including a major cyberattack, executive shakeups, and a stock decline of more than -50% in the past month. Prosecutors are focusing on whether UnitedHealth exaggerated diagnoses to receive higher taxpayer-funded payments, a practice that has added billions to Medicare costs. UnitedHealth continues to dispute allegations, while shareholders and regulators express growing distrust toward the company.
What an incredible opportunity to add some shares of UNH to end the week! I picked up some around $250 inside of my “Large Market Beaters” strategy on Double Finance. This cash flow monster will be fine over the long-term and this was a no-brainer to me.
Major Economic Events:
Inflation data for both consumers and producers were loved by the market, and retail sales are going through some tariff growing pains.
Inflation for Consumers (CPI)
The annual U.S. inflation rate slowed to 2.3% in April, the lowest since February 2021 and slightly below the expected +2.4%, according to the Bureau of Labor Statistics.
The consumer price index (CPI) rose +0.2% for the month, while core CPI, which excludes food and energy, also increased +0.2% monthly and +2.8% annually, matching forecasts. Shelter costs — making up about a third of the CPI — rose +0.3% and were responsible for over half of the overall monthly increase.
Egg prices plunged -12.7% but remained +49.3% higher than a year ago; used car prices dropped -0.5%, food prices dipped -0.1%, and energy costs rose +0.7%. Despite the easing inflation, President Trump’s newly imposed 10% tariffs on all imports still pose uncertainty for future inflation trends. The Federal Reserve, which favors the Commerce Department’s inflation measure, is now expected to delay rate cuts until September, with only two reductions anticipated in 2025 instead of three.
“Good news on inflation, and we need it given inflation shocks from tariffs are on their way. Non-tariffed goods are still in the pipeline, and perhaps some importers have absorbed their tariff costs for now.”
Inflation for Producers (PPI)
U.S. producer prices fell -0.5% in April, the sharpest monthly decline since 2019, defying expectations of a +0.2% increase and suggesting that firms are absorbing tariff-related costs rather than passing them on to consumers.
Core producer prices excluding food and energy dropped -0.4%, the most since 2015, while the even narrower measure excluding food, energy, and trade declined -0.1% — its first drop in five years.
Year-over-year, the less-volatile core PPI measure rose +2.9%. Goods prices excluding food and energy actually rose +0.4%, driven in part by higher costs for business equipment, though final-demand services prices dropped -0.7% — the biggest drop since 2009 — largely due to shrinking margins in machinery and vehicle wholesaling. As you might expect. The both the CPI and PPI results are making a lot of people agree with President Trump that the Fed should have more urgency to cut rates.
“For now, distributors are not passing on all these extra costs to consumers… It will take more time to assess whether a sustained squeeze on margins is occurring.”
Retail Sales
U.S. retail sales grew just +0.1% in April, signaling a slowdown in consumer spending after a strong March, as Americans pulled back on purchases of cars, sporting goods, and imported items.
Control group sales — a key input for GDP — declined -0.2%, indicating a weak start to the second quarter despite earlier momentum. This pullback may reflect consumers rushing to buy goods before tariffs increased, but that boost appears to be fading.
Concerns over rising prices, driven by tariffs, are dampening consumer sentiment, though inflation has remained milder than expected for now. Businesses like Walmart and Energizer warn of mounting economic pressures, while the Federal Reserve remains cautious, keeping rates steady amid uncertainty. Meanwhile, producer prices had their sharpest drop in five years (as mentioned above), suggesting companies are absorbing some tariff costs rather than passing them to consumers.
“We see good reasons to think that spending will look a lot weaker in the numbers for May and June. Retailers were probably helped last month by a final rush of purchases made in anticipation of the higher prices that could accompany new tariffs, which can’t last, while inventory buffers will have delayed the pass-through from new tariffs to consumers.”
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