3 Reasons to Avoid UTHR and 1 Stock to Buy Instead Petr Huřťák Wed, October 7, 2026 at 11:12 AM EDT 3 min read UTHR +2.49% ^GSPC -0.55% Trade UTHR on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Since April 2026, United Therapeutics has been in a holding pattern, posting a small loss of 4.2% while floating around $541.72. The stock also fell short of the S&P 500's 17.5% gain during that period.
Is there a buying opportunity in United Therapeutics, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it's free.
We don't have much confidence in United Therapeutics. Here are three reasons why UTHR doesn't excite us, plus one stock we'd rather own.
Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect United Therapeutics's revenue to drop by 3.2%, a decrease from its 14.7% annualized growth for the past five years. This projection is underwhelming and implies its products and services will see some demand headwinds.
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Looking at the trend in its profitability, United Therapeutics's adjusted operating margin decreased by 6.6 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its adjusted operating margin for the trailing 12 months was 49.4%.
If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
As you can see below, United Therapeutics's margin dropped by 1.8 percentage points over the last five years. Continued declines could signal it is in the middle of an investment cycle. United Therapeutics's free cash flow margin for the trailing 12 months was 34.6%.
United Therapeutics isn't a terrible business, but it doesn't pass our bar. With its shares trailing the market in recent months, the stock trades at 18× forward P/E (or $541.72 per share). While this valuation is fair, the upside isn't great compared to the potential downside. We're fairly confident there are better investments elsewhere. Let us point you toward a dominant aerospace business that has perfected its M&A strategy.
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