UnitedHealth Group Inc (NYSE: UNH) – the largest US health insurer – is trading at a historically attractive valuation at the time of writing.
Despite the apparent bargain, however, famed investor Jim Cramer is urging caution in loading up on UNH shares.
According to the former hedge fund manager, investors should wait for the company’s Q2 earnings on July 29th to decide whether it’s worth owning UnitedHealth stock in the back half of 2025.
UnitedHealth stock may not have bottomed yet
UnitedHealth shares have taken a significant blow in recent months, falling more than 40% year-to-date following a rare earnings miss and a downward revision of full-year guidance.
The quarterly released posted in April marked the insurer’s first to have come in shy of Wall Street estimates since the global financial crisis (2008).
That said, some investors currently see value in UNH stock that’s down nearly 50% versus its all-time high of about $630 in late 2024.
Plus, insider buying has also picked up, with chief executive Stephen Hemsley acquiring 86,000 shares at $288 each – a $25 million vote of confidence.
Still, Jim Cramer isn’t entirely sure the bottom is in yet. “I can’t pound the table,” he said recently on “Mad Money” – referencing the uncertainty surrounding the company’s earnings on July 29th.
“There’s going to be what I think is a clearing event … you may have to pay up 50 points if it turns out this is a good event. But I’m not going to tell you to buy more right now,” he added.
Investors should be patient in buying UNH shares
UnitedHealth’s earnings on July 29th could be a turning point for the NYSE-listed firm.
Investors are hoping for clarity on the company’s earnings trajectory, regulatory headwinds, and the performance of its Optum division, all have which have come under scrutiny.
Cramer’s hesitation reflects broader market skepticism. UNH’s recent disappointment on outlook rattled confidence, especially given its long-standing reputation for operational excellence.
The fact that Mad Money host, once bullish on the stock, is not urging restraints underscores the stakes. For long-term investors, UnitedHealth remains a healthcare powerhouse with a diversified business model and strong cash flow.
But in the short term, the July 29th update could either reignite bullish momentum or deepen the sell-off in UnitedHealth stock. Therefore, patience may be the most prudent strategy until then.
How Wall Street recommends playing UnitedHealth
Despite aforementioned risks and a key event scheduled for July 29th, Wall Street remains at least somewhat bullish on UNH shares at current levels.
According to The Wall Street Journal, the consensus rating on the healthcare stock currently sits at “overweight” with the mean target of about $364, indicating potential upside of about 13% from here.
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