Reddit Investment Analysis: UNH and LULU Bullish Thesis Evaluation

This analysis is based on a Reddit post [1] published on November 14, 2025, at 3:47 PM EST, which presents investment theses for UnitedHealth Group (UNH) and Lululemon Athletica (LULU). The poster argues UNH is attractively priced near $320 with potential upside from Berkshire Hathaway’s upcoming 13F filing, while maintaining bullish sentiment on LULU citing China expansion opportunities and strong fundamentals.

The Reddit poster’s UNH thesis appears well-supported by market data and recent developments. UNH is currently trading at $321.27, down 3.38% on the day, but has shown significant volatility with a 52-week range of $234.60 to $622.83 [0]. The poster’s claim about Berkshire Hathaway’s involvement is accurate - SEC filings confirm Berkshire initiated a position in UNH during Q2 2025, adding approximately 5 million shares valued at around $1.57 billion with an average cost basis near $314 [2][4].

Recent market sentiment has shifted dramatically toward UNH. According to 24/7 Wall St., Reddit investor sentiment flipped from “deeply bearish” to “bullish” within days, with sentiment scores jumping from 18 (very bearish) to 68-72 (bullish territory) [7]. This sentiment shift helped drive a 5.8% surge in UNH shares over two days, climbing from $321 to $340 [7].

Fundamentally, UNH maintains strong business metrics with UnitedHealthcare segment revenue growing 16% year-over-year despite margin pressure. Management raised full-year 2025 guidance to at least $16.25 adjusted EPS while signaling “accelerating growth in 2026” [7]. Wall Street analysts remain bullish with 67% of 27 covering analysts rating UNH as buy or strong buy, with an average price target of $381 suggesting 13% upside from current levels [7].

The Reddit poster’s bullish stance on LULU despite recent weakness presents a more complex picture. LULU is trading at $170.78, up 0.66% on the day, but has suffered significantly with a 54.13% year-to-date decline and 48.29% drop over the past year [0]. The poster’s China expansion thesis is well-founded - Lululemon operates 165 stores across 45 Chinese cities and aims to reach 200 stores under its “Power of Three x2” strategy [9][10]. Mainland China revenue grew 25% year-over-year in Q2 fiscal 2025 [11].

However, LULU faces significant structural challenges. The company attributed recent revenue growth deceleration to a “stale assortment that lacks newness in specific categories, such as lounge and social” [8]. Full-year guidance calls for revenue growth of only 3-4%, implying further deceleration in the holiday quarter [8]. Despite these challenges, LULU trades at attractive valuations with a forward P/E around 13, which some analysts consider to be pricing in pessimistic long-term growth assumptions [8].

1. Value Rotation Opportunity
   : Both stocks represent potential value plays, but with different risk profiles. UNH offers healthcare stability with institutional backing from Berkshire, while LULU provides discretionary consumer exposure with international growth potential.

2. Sentiment vs. Fundamentals Divergence
   : UNH shows a remarkable convergence of improving sentiment and strengthening fundamentals, while LULU demonstrates a divergence where strong international growth (China +25% YoY) coexists with domestic operational challenges [8][11].

3. Institutional Validation
   : Berkshire Hathaway’s UNH position provides institutional credibility that could attract further institutional inflows, particularly if the upcoming 13F shows position increases [2][4].

The Reddit post captures an important market dynamic where retail sentiment is shifting rapidly around UNH following Berkshire’s investment and improving fundamentals [7]. This suggests sophisticated retail investors are recognizing value opportunities in high-quality healthcare businesses temporarily depressed by regulatory concerns.

For LULU, the situation reflects broader challenges facing premium consumer discretionary brands in a potentially weakening economic environment. The company’s strong balance sheet and international growth potential may provide downside protection, but domestic turnaround execution remains uncertain [8].

• Regulatory Risk
  : Healthcare policy changes could impact Medicare reimbursement rates and profitability
• Margin Pressure
  : Rising medical costs continue to pressure operating margins, with medical cost trends remaining a key overhang [7]
• Berkshire Position Risk
  : Any changes in Berkshire’s position in the upcoming 13F could create significant price volatility

• 13F Catalyst
  : The upcoming Berkshire 13F filing could provide a positive catalyst if position increases are revealed
• Value Recognition
  : Continued rotation to value stocks could benefit UNH given its current valuation (P/E 16.74x) below historical averages [0]
• Growth Acceleration
  : Management’s signaled “accelerating growth in 2026” could drive multiple expansion [7]

• Execution Risk
  : International expansion, particularly in China, carries significant operational and cultural challenges [9][10][11]
• Fashion Cycle Risk
  : Shifting consumer preferences and style trends could impact demand for current product lines [8]
• Economic Sensitivity
  : As a discretionary retailer, LULU is vulnerable to economic downturns and reduced consumer spending

• China Expansion
  : Continued strong growth in China (25% YoY) could offset domestic weakness [11]
• Valuation Recovery
  : Current P/E of 11.66x represents historically low levels, potentially pricing in excessive pessimism [0]
• Product Turnaround
  : Successful execution of assortment refresh and inventory adjustments could reignite domestic growth [8]

• Current Price: $321.27 [0]
• P/E Ratio: 16.74x [0]
• ROE: 18.60% [0]
• Operating Margin: 6.06% [0]
• Analyst Consensus Target: $408.00 (27% upside) [0]
• Berkshire Cost Basis: ~$314 [2]

• Current Price: $170.78 [0]
• P/E Ratio: 11.66x [0]
• ROE: 42.05% [0]
• Operating Margin: 22.88% [0]
• Analyst Consensus Target: $170.00 (essentially flat) [0]
• China Revenue Growth: 25% YoY [11]

1. Berkshire’s Current Intentions
   : The upcoming 13F filing will reveal whether Berkshire increased, maintained, or decreased their UNH position [2][4]
2. UNH Margin Trajectory
   : Medical cost trends and Medicare reimbursement policy developments remain key variables for UNH’s profitability [7]
3. LULU Turnaround Timeline
   : Management’s inventory adjustments and assortment refresh may require several quarters to impact sales growth meaningfully [8]
4. Consumer Spending Environment
   : Both companies face uncertainty regarding broader consumer spending patterns and economic conditions [8][10]

The Reddit post presents two distinct investment opportunities with different risk-reward profiles. UNH appears to offer a more straightforward value proposition with institutional backing and improving fundamentals, while LULU represents a higher-risk turnaround opportunity with significant international growth potential but domestic execution challenges.