It took a year of pain, but UnitedHealth Group Inc (NYSE:UNH) just gave hedge fund stars David Tepper and Michael Burry a clean bill of health. After a bruising 35% slide in the past 12 months, the insurance giant finally delivered a quarter that suggests the patient is stabilizing — and early believers are looking smarter for staying in the trade.
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Earnings That Finally Hit The Right Nerve
UnitedHealth reported third-quarter EPS of $2.92, topping Wall Street's $2.79 estimate, on revenue of $113.16 billion, just below consensus. Management also bumped its FY2025 outlook to at least $14.90 from $14.65 prior, while teasing sustainable double-digit growth beginning in 2027.
That's the kind of long-term vitality investors wanted to see after months of fretting about medical cost spikes. The message: UnitedHealth isn't out of the woods just yet, but it's finally responding to treatment.
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The Hedge Fund Waiting Room
Back in the second quarter, when sentiment was still in the ICU, Tepper's Appaloosa and Burry's Scion Asset Management were among the funds quietly building positions near the $415 mark. They didn't buy the top — they bought the panic.
Now, with shares up about 6% over the past month and rallying 5% pre-market after earnings, those early positions are looking prescient. And with no signs either manager has sold, this quarter's guidance boost might just be the follow-up call they were hoping for.
A Recovery In Progress
Sure, the stock's still down roughly 27% year-to-date, and UnitedHealth has plenty of rehab ahead before it's back to its 2023 highs. But the outlook upgrade and talk of a 2027 growth rebound give this recovery narrative a much stronger heartbeat.
UnitedHealth's third quarter isn't just a beat — it's a signal that the turnaround prescription might be working.
For Tepper and Burry, the chart is finally trending in the right direction, and the diagnosis this quarter is simple: patience pays.
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