UNH's Cash Flow Masks Declining Margins

UnitedHealth (UNH) has seen its stock price rebound by about 38% over the past six months, despite declining operating margins. The company's trailing twelve-month operating margin is now at 4.8%, down from 7.3% a year ago.

The cash flow for UNH, however, remains robust. Free cash flow has run around 167% of reported net income over the trailing twelve months, with operating cash flow in the second quarter of 2026 reaching approximately $11 billion, or about 1.9 times net income.

UNH's management has attributed this discrepancy to strong earnings and the timing of government payments. The company is also using its excess cash to strengthen its balance sheet and fund operational automation, with a focus on reducing prior authorization volume by 30% by the end of 2026.