What do you think about this format for the Setup tables, which now include high-level thoughts on trading approach? Are these useful? What should I add or subtract?
Examples for Tesla and UnitedHealth below:
Looking at the data heading into Q1’26, the setup leans short (or at minimum, stay away). Here’s why:
Valuation is stretched. The 14.7x forward P/S is the highest in the entire table — above even the Q3’25 print (14.4x) which only got a +2.3% reaction despite a beat. You’re paying peak multiple into the print.
Relative performance has already faded. Down 983 bps vs. SPY since last quarter, which historically has been a mixed signal — but combined with the elevated valuation, it suggests the stock has given back some froth without getting cheap.
Forward growth estimates are uninspiring. NTM Rev growth at 7.6% and NTM EPS growth at 10.9% are near the lowest in the table. You’re paying the highest multiple for the weakest forward growth setup — that’s a bad combination.
The pattern on beats at high multiples isn’t great. Q3’24 (6.2x, +20.8% beat → +21.9%) worked because the multiple was compressed. Q4’22 at 4.3x got +11%. But when the multiple has been elevated (Q4’25 at 13.5x, beat of 11.9% → -3.5%; Q2’25 at 10.4x → -8.2%), beats haven’t been rewarded.
Short interest at 2.0% is low, so there’s no squeeze fuel to bail out longs on a miss.
Options are implying ±4.0%, so the market isn’t pricing in a huge move — but the risk/reward skews negative given the valuation/growth mismatch. A miss or even a meet could easily take it down 4-8%, while a beat at this multiple may get sold into (as Q4’25 showed).
The cleanest expression is probably a short or a put spread into the print, with the thesis that the multiple doesn’t deserve to expand further without a material growth re-acceleration.
This one’s interesting — it leans long, but with caveats. Here’s the read:
Valuation has compressed meaningfully. 18.2x forward P/E is well off the 20-22x range it traded at through most of 2022-2023, and down from the 21.9x at Q3’25. At 83% vs. SPY, that’s the cheapest relative valuation since Q2’24 (75%) — and that quarter got a +5.2% reaction on a 4.9% beat.
The stock has been outperforming into the print. +932 bps vs. SPY is a strong run, which could cut both ways — but historically UNH has been rewarded when it comes in hot with a compressed multiple. Q1’25 (+2,704 bps, 19.0x P/E → +22.4%) and Q2’23 (-2,156 bps but 17.1x → +7.2%) show the pattern.
NTM Rev growth at (1.6%) is the red flag. That’s the worst in the entire table — negative forward revenue growth is ugly for a name that’s reliably grown top-line 7-12%. NTM EPS at 9.5% is fine but not exciting. If that negative rev growth estimate is right, it could cap upside.
The Q4’25 disaster is the elephant in the room. -19.6% on a 0.4% beat at 20.0x — that was a blowup driven by the medical cost ratio / guidance issues, not the beat/miss itself. The question is whether that risk has been repriced at 18.2x and 83% relative.
Consensus revisions aren’t visible yet for Q1’26, but the prior pattern shows analysts have been cutting — the stock is trading like expectations have been reset.
Short interest at 2.0% is elevated for UNH (historically 0.5-1.5%), which adds squeeze potential on an upside surprise.
Options imply ±5.5%, and the stock is trading well above both the 200D and 50D (+3.8%/+13.4%), suggesting momentum support.
The bull case: Expectations and valuation have been reset after the Q4’25 blowup, the stock has been recovering, and a clean print with stabilizing medical cost trends could squeeze shorts and push it 5-8% higher. The compressed relative valuation gives you a margin of safety you rarely get with UNH.
The risk: If medical cost pressures persist or guidance disappoints again, the Q4’25 playbook repeats and the +932 bps run gets unwound.
Net, I’d lean long — the valuation reset and elevated short interest tilt the risk/reward favorably, but I’d size it smaller than normal given the tail risk from the cost ratio narrative.
Looks great!