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Model Introduction1
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Key Inputs
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Units ($ in millions)
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Company nameUnitedHealth Group
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TickerUNH
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Sector
Insurance: Life & Health
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Valuation date12/18/2023
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Stub period3.6%
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Latest shares of outstanding924,925,293
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Md-year conventionNo
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Fiscal year end12/31/2022
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First fiscal year end12/31/2023
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Date of latest 10K filing12/31/2022
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Date of latest 10Q filing9/30/2023
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WACC Information
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After tax cost of debt3.53%
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Cost of equity9.29%
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Weighted average cost of capital
9.43%
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First year multiples
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Other assumptions
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Effective tax rate of UnitedHealth Group as of the latest filing
21.7%
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Use growth or margins?Margins
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Background and operations of UnitedHealth Group:
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UntiedHealth Group operates as a diversified health care company in the US and Canada. It operates through four segments:
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UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer oriented
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health benefit plans and services for national employers, public sector employers, and individuals; health care coverage, and
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health and well-beiong services to individuals age 50 and older; Medicaid plans, children's health insurance and health care
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programs; and health and dental benefits, and hospotal and clinical services, as well as health care benefits products and
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services to state programs. Optum Health segment provides health care delivery, care management, wellness and consumer
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engaements, and health financial services for consumers, care delivery systems, providers, and public sector entities.
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The Optum Insight segment offers software and information products, advisory consulting arrangements, and managed
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services outsourcing contracts to hospital systems, health plans, and governments. Optum Rx segment provides pharmacy care
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services and programs, including retail network contracting, home delivery, speciality and community health pharmacy
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services as well as developing programs in the area of step therapy, and drug adherence.
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Case Manager
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Active CaseBase Case
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Output:
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Share price as of the valuation $ 526.55
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Approach 1 $ 597.67
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Approach 2 $ 562.89
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Analysis Undervalued
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Additional notes:
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These prices are based on my assumptions and what I think about the company. DCFs are extremely prone to
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assumptions, and so my advice would be to put in what you think will happen and see what the value comes out to.
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