Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at UnitedHealth (NYSE: UNH) and its peers.

Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.

The 11 health insurance providers stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.2% since the latest earnings results.

Weakest Q1: UnitedHealth (NYSE: UNH)

With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.

UnitedHealth reported revenues of $109.6 billion, up 9.8% year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ full-year EPS guidance estimates and a slight miss of analysts’ EPS estimates.

“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%,” said Andrew Witty, chief executive officer of UnitedHealth Group.

UnitedHealth delivered the weakest performance against analyst estimates of the whole group. The company added 395,000 customers to reach a total of 54.12 million. Unsurprisingly, the stock is down 49.3% since reporting and currently trades at $297.10.

Is now the time to buy UnitedHealth? Access our full analysis of the earnings results here, it’s free.

Best Q1: CVS Health (NYSE: CVS)

With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.

CVS Health reported revenues of $94.59 billion, up 7% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ EPS estimates.

The market seems unhappy with the results as the stock is down 5.9% since reporting. It currently trades at $62.78.

Is now the time to buy CVS Health? Access our full analysis of the earnings results here, it’s free.

Humana (NYSE: HUM)

With over 80% of its revenue derived from federal government contracts, Humana (NYSE: HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Humana reported revenues of $32.11 billion, up 8.4% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a solid beat of analysts’ EPS estimates but a significant miss of analysts’ customer base estimates.

As expected, the stock is down 11.4% since the results and currently trades at $229.89.

Read our full analysis of Humana’s results here.

Clover Health (NASDAQ: CLOV)

Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.

Clover Health reported revenues of $462.3 million, up 33.3% year on year. This result lagged analysts' expectations by 1.4%. In spite of that, it was a very strong quarter as it put up a solid beat of analysts’ EPS estimates and full-year EBITDA guidance exceeding analysts’ expectations.

The company added 20,754 customers to reach a total of 103,418. The stock is down 6.7% since reporting and currently trades at $3.12.

Read our full, actionable report on Clover Health here, it’s free.

Alignment Healthcare (NASDAQ: ALHC)

Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare (NASDAQ: ALHC) provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.

Alignment Healthcare reported revenues of $926.9 million, up 47.5% year on year. This print beat analysts’ expectations by 4.4%. It was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates.

Alignment Healthcare delivered the fastest revenue growth among its peers. The company added 28,400 customers to reach a total of 217,500. The stock is down 10.8% since reporting and currently trades at $14.90.

Read our full, actionable report on Alignment Healthcare here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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