In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)
Weighted Average Cost of Capital (WACC)
FCFF Growth Rate (g)

UnitedHealth Group Inc., free cash flow to the firm (FCFF) forecast

US$ in millions, except per share data

Year	Value	FCFF_t or Terminal value (TV_t)	Calculation	Present value at 9.29%
0¹	FCFF₀	19,585
1	FCFF₁	20,953	= 19,585 × (1 + 6.98%)	19,172
2	FCFF₂	22,291	= 20,953 × (1 + 6.38%)	18,663
3	FCFF₃	23,580	= 22,291 × (1 + 5.78%)	18,064
4	FCFF₄	24,801	= 23,580 × (1 + 5.18%)	17,385
5	FCFF₅	25,937	= 24,801 × (1 + 4.58%)	16,636
5	Terminal value (TV₅)	576,060	= 25,937 × (1 + 4.58%) ÷ (9.29% – 4.58%)	369,486
Intrinsic value of UnitedHealth Group Inc. capital				459,406
Less: Commercial paper, long-term debt and other financing obligations (fair value)				74,392
Intrinsic value of UnitedHealth Group Inc. common stock				385,014

Intrinsic value of UnitedHealth Group Inc. common stock (per share)				$428.94
Current share price				$401.73

Based on: 10-K (reporting date: 2025-12-31).

¹ See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

UnitedHealth Group Inc., cost of capital

	Value¹	Weight	Required rate of return²	Calculation
Equity (fair value)	360,591	0.83	10.46%
Commercial paper, long-term debt and other financing obligations (fair value)	74,392	0.17	3.59%	= 4.48% × (1 – 19.94%)

Based on: 10-K (reporting date: 2025-12-31).

¹ US$ in millions

Equity (fair value) = No. shares of common stock outstanding × Current share price
= 897,594,847 × $401.73
= $360,590,777,885.31

Commercial paper, long-term debt and other financing obligations (fair value). See details »

² Required rate of return on equity is estimated by using CAPM. See details »

Required rate of return on debt. See details »

Required rate of return on debt is after tax.

Estimated (average) effective income tax rate
= (12.90% + 24.10% + 20.50% + 21.70% + 20.50%) ÷ 5
= 19.94%

WACC = 9.29%

FCFF growth rate (g) implied by PRAT model

UnitedHealth Group Inc., PRAT model

	Average	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Selected Financial Data (US$ in millions)
Interest expense		4,002)	3,906)	3,246)	2,092)	1,660)
Net earnings attributable to UnitedHealth Group common shareholders		12,056)	14,405)	22,381)	20,120)	17,285)

Effective income tax rate (EITR)¹		12.90%	24.10%	20.50%	21.70%	20.50%

Interest expense, after tax²		3,486)	2,965)	2,581)	1,638)	1,320)
Add: Cash dividends paid on common shares		7,916)	7,533)	6,761)	5,991)	5,280)
Interest expense (after tax) and dividends		11,402)	10,498)	9,342)	7,629)	6,600)

EBIT(1 – EITR)³		15,542)	17,370)	24,962)	21,758)	18,605)

Short-term borrowings and current maturities of long-term debt		6,069)	4,545)	4,274)	3,110)	3,620)
Long-term debt, less current maturities		72,320)	72,359)	58,263)	54,513)	42,383)
Shareholders’ equity attributable to UnitedHealth Group		94,110)	92,658)	88,756)	77,772)	71,760)
Total capital		172,499)	169,562)	151,293)	135,395)	117,763)
Financial Ratios
Retention rate (RR)⁴		0.27	0.40	0.63	0.65	0.65
Return on invested capital (ROIC)⁵		9.01%	10.24%	16.50%	16.07%	15.80%
Averages
RR	0.52
ROIC	13.52%

FCFF growth rate (g)⁶	6.98%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

¹ See details »

2025 Calculations

² Interest expense, after tax = Interest expense × (1 – EITR)
= 4,002 × (1 – 12.90%)
= 3,486

³ EBIT(1 – EITR) = Net earnings attributable to UnitedHealth Group common shareholders + Interest expense, after tax
= 12,056 + 3,486
= 15,542

⁴ RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [15,542 – 11,402] ÷ 15,542
= 0.27

⁵ ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 15,542 ÷ 172,499
= 9.01%

⁶ g = RR × ROIC
= 0.52 × 13.52%
= 6.98%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value₀ × WACC – FCFF₀) ÷ (Total capital, fair value₀ + FCFF₀)
= 100 × (434,983 × 9.29% – 19,585) ÷ (434,983 + 19,585)
= 4.58%

where:

Total capital, fair value₀ = current fair value of UnitedHealth Group Inc. debt and equity (US$ in millions)
FCFF₀ = the last year UnitedHealth Group Inc. free cash flow to the firm (US$ in millions)
WACC = weighted average cost of UnitedHealth Group Inc. capital

FCFF growth rate (g) forecast

UnitedHealth Group Inc., H-model

Year	Value	g_t
1	g₁	6.98%
2	g₂	6.38%
3	g₃	5.78%
4	g₄	5.18%
5 and thereafter	g₅	4.58%

where:
g₁ is implied by PRAT model
g₅ is implied by single-stage model
g₂, g₃ and g₄ are calculated using linear interpolation between g₁ and g₅

Calculations

g₂ = g₁ + (g₅ – g₁) × (2 – 1) ÷ (5 – 1)
= 6.98% + (4.58% – 6.98%) × (2 – 1) ÷ (5 – 1)
= 6.38%

g₃ = g₁ + (g₅ – g₁) × (3 – 1) ÷ (5 – 1)
= 6.98% + (4.58% – 6.98%) × (3 – 1) ÷ (5 – 1)
= 5.78%

g₄ = g₁ + (g₅ – g₁) × (4 – 1) ÷ (5 – 1)
= 6.98% + (4.58% – 6.98%) × (4 – 1) ÷ (5 – 1)
= 5.18%

UnitedHealth Group Inc. (NYSE:UNH)

Present Value of Free Cash Flow to the Firm (FCFF)

Intrinsic Stock Value (Valuation Summary)

Weighted Average Cost of Capital (WACC)

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

FCFF growth rate (g) implied by single-stage model

FCFF growth rate (g) forecast