Company Overview - Oscar Health, Inc. (OSCR) shares increased by 7.8% to close at $16.11, following a significant volume of trading, contrasting with a 14.7% loss over the previous four weeks [1] - The company is positioned to capitalize on a substantial opportunity in the healthcare market, as approximately 12% of household income is spent on employer-sponsored health plans [2] Growth Strategy - Oscar's growth strategy focuses on building sustainable and scalable operations, enhancing member experience, advancing technology, and introducing innovative offerings to expand its market presence [3] Financial Performance Expectations - The upcoming quarterly earnings report is expected to show earnings of $0.34 per share, reflecting a year-over-year increase of 70%, with revenues projected at $2.86 billion, a 29% increase from the same quarter last year [4] - However, the consensus EPS estimate has been revised 0.7% lower in the last 30 days, indicating a potential negative trend in earnings estimate revisions [5] Industry Context - Oscar Health is part of the Zacks Insurance - Multi line industry, which includes other companies like MBIA (MBI), that has seen a decline of 6.7% over the past month [6] - MBIA's EPS estimate for the upcoming report remains unchanged at -$0.08, representing a 97.2% change from the previous year [7]

Core Insights - Hims & Hers Health has seen a significant increase in share price, up 138% in 2025, contrasting with other major healthcare stocks that have not performed as well [3][2] - Oscar Health is positioned as a potential multibagger in the healthcare sector, drawing comparisons to Hims & Hers due to its technology-first approach in transforming access to health insurance [4][9] Company Overview - Hims & Hers focuses on telemedicine services, appealing to younger demographics by providing convenient access to healthcare [6][7] - Oscar Health targets Affordable Care Act (ACA) members and small employers, aiming to leverage a tech-first digital platform to enhance customer acquisition [10][9] Financial Performance - Oscar Health has shown strong revenue growth over the past five years, with rising cash flow and liquidity, indicating a solid financial profile despite competition [12] - The total addressable market (TAM) for Oscar could expand from $160 billion to $720 billion by targeting individual coverage health reimbursement arrangements (ICHRAs) with small and medium-sized businesses [16] Market Position and Strategy - Oscar Health's market capitalization is approximately $4 billion, which is aligned with its cash balance, suggesting that the market may undervalue its insurance business [17] - The company is diversifying its revenue streams to mitigate risks associated with potential regulatory changes affecting the ACA [14][19] Investment Outlook - There are potential near-term challenges for Oscar Health, but the long-term vision is seen as compelling, with expectations for significant share price appreciation similar to Hims & Hers [19][18]

Group 1 - The focus is on growth and dividend income, with a strategy aimed at creating a portfolio that emphasizes compounding dividend income and growth [1] - The portfolio is structured to provide monthly dividend income that increases through dividend reinvestment and annual raises [1] Group 2 - There is an intention to potentially start a position in OSCR in the near future [2] - The article serves as personal opinion and is not intended as a recommendation for stock purchase or sale [2] Group 3 - Past performance is not indicative of future results, and no specific investment advice is provided [3] - The views expressed may not represent those of Seeking Alpha as a whole, and the analysts may not be licensed or certified [3]

Group 1 - Healthcare stocks in the U.S. are experiencing pressure due to increasing regulatory headwinds and rising costs [1]

I am rating Oscar Health, Inc. (NYSE: OSCR ) as a hold due to a proposed steep budget cut of $163 billion in the 2026 budget estimates. The Health and Human Services (HHS) cut is estimated to be $33.3 billion, an $18 billion cutFirst Principles Partners is an equity research analyst specializing in technology, innovation, and sustainability investment. My unique approach, "First Principles," involves breaking down complex problems to their most basic elements in terms of financial and technology, enabling m ...

Membership and Growth - As of March 31, 2025, Oscar Health, Inc. has approximately 2.0 million effectuated members actively enrolled in its plans[90]. - Membership increased to 2,039,467 as of March 31, 2025, up from 1,448,408 in 2024, with individual and small group membership rising to 2,021,484[121]. - Medicaid redeterminations initiated on April 1, 2023, have previously contributed to membership increases, but future impacts are expected to be less significant[100]. - The company anticipates lower Special Enrollment Period (SEP) membership growth throughout 2025, which may affect per member levels of premiums and claims[102]. - Regulatory developments, including changes to the Affordable Care Act (ACA) and the implementation of Program Integrity Rules, may impact membership growth and overall market participation[96][98]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $3,046.3 million, a 42.3% increase from $2,142.3 million in the same period in 2024[118]. - Premium revenue increased by $902.1 million, or 43%, for the three months ended March 31, 2025, compared to the same period in 2024, driven by higher membership[120]. - Earnings from Operations is calculated as total revenue minus total operating expenses, serving as a primary metric for assessing operating performance[94]. - Net income attributable to Oscar Health, Inc. is a key indicator of profitability and operational efficiency, allowing for informed strategic planning[95]. Medical Expenses and Ratios - Medical expenses rose by $704.9 million, or 45%, for the three months ended March 31, 2025, primarily due to increased membership[124]. - The Medical Loss Ratio (MLR) is a key metric indicating medical expenses as a percentage of net premiums, which is subject to federal and state minimum requirements[92]. - Medical Loss Ratio (MLR) increased to 75.4% for the three months ended March 31, 2025, compared to 74.2% in 2024[118]. Administrative and Operating Expenses - The Selling, General and Administrative Expense Ratio (SG&A Expense Ratio) reflects the company's ability to manage its overall administrative cost base as a percentage of total revenue[93]. - Selling, general, and administrative expenses increased by $88.6 million, or 22%, for the three months ended March 31, 2025, due to higher distribution and selling expenses[126]. Cash Flow and Investments - Net cash provided by operating activities for the three months ended March 31, 2025, was $878.5 million, compared to $634.4 million for the same period in 2024, reflecting a 38.5% increase[150]. - Net cash used in investing activities for the three months ended March 31, 2025, was $174.2 million, a decrease from $300.6 million in the same period of 2024, indicating a reduction in security purchases[151]. - Net cash provided by financing activities for the three months ended March 31, 2025, was $4.9 million, down from $27.3 million in the same period of 2024, showing a significant decrease[152]. - Total cash and cash equivalents and investments held by health insurance subsidiaries were $4,742.1 million as of March 31, 2025, up from $3,808.0 million in December 2024[130]. - The combined statutory capital and surplus of health insurance subsidiaries was approximately $1,520.3 million as of March 31, 2025, exceeding minimum capital requirements[131]. Tax and Regulatory Considerations - The effective tax rate was approximately 4.41% for the three months ended March 31, 2025, compared to 0.56% in 2024[127]. - The risk adjustment programs administered by CMS are designed to mitigate adverse selection and provide revenue stability, with estimates subject to variability based on member risk profiles[104][105]. Market and Investment Risks - Market risk exposure is primarily due to potential changes in interest rates and inflation, impacting investment income and interest expense[153]. - The fair value of investments would decrease by approximately $43.9 million with a hypothetical 1% increase in interest rates as of March 31, 2025[154]. - Investment policies require that U.S. corporate bonds and asset-backed securities have final maturities of no more than five years[145]. - Restricted investments primarily consist of cash and cash equivalents and U.S. Treasury securities, classified as long-term due to regulatory requirements[147]. - Cash flows from operations may differ substantially from net income due to non-cash charges or changes in balance sheet accounts[148].

Financial Data and Key Metrics Changes - The company reported total revenue of $3 billion for the quarter, a 42% increase year over year [6] - Net income was approximately $275 million, a significant improvement of $98 million over the prior year period [7][22] - Earnings from operations grew by $112 million to $297 million, with an operating margin of 9.8%, an increase of 110 basis points year over year [8][21] - The medical loss ratio (MLR) increased by 120 basis points year over year to 75.4% [8][18] - The selling, general and administrative (SG&A) expense ratio improved to 15.8%, a 260 basis point improvement year over year, marking the lowest in the company's history [8][20] Business Line Data and Key Metrics Changes - The company closed the quarter with approximately 2 million effectuated members, a 41% increase year over year [9][16] - Membership growth was driven by strong retention and above-market growth during open enrollment [16] - The company launched Oscar Community Resources with Find Help, enhancing member services beyond medical care [10] Market Data and Key Metrics Changes - The company noted that the individual market is a cornerstone of American healthcare, driving a record low uninsured rate [13] - The proposed program integrity initiatives by CMS are seen as positive for the long-term sustainability of the market, although the shortened enrollment window may constrain shopping for plans [12][51] Company Strategy and Development Direction - The company aims to deepen market presence through new partnerships and innovative plan designs [10][14] - The focus remains on building a scalable and efficient technology infrastructure to enhance member experience and operational efficiency [11] - The company is engaged with policymakers to advocate for solutions that strengthen the individual market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets due to disciplined execution and strong top-line growth [14][24] - The company anticipates membership trends to rise in the first half of the year but expects a decline in the latter half due to regulatory changes [31] - Management highlighted the importance of a trustworthy market and the need for adequate time for individuals to shop for plans [51] Other Important Information - The company reaffirmed its full-year guidance metrics, expecting total revenue in the range of $11.2 billion to $11.3 billion for 2025 [23][24] - Adjusted EBITDA for the quarter was $329 million, reflecting a substantial year-over-year improvement [22] Q&A Session Summary Question: Membership expectations for the second quarter and the rest of the year - Management expects membership to trend up in the first half of the year but to decline in the latter half due to regulatory changes [31][32] Question: Grace period membership context and its impact on MLR - Management indicated that the gap between effectuated and paid membership is expected to normalize, with prior period development impacting MLR [36][38] Question: Utilization patterns between new and retired members - Management noted higher inpatient utilization with favorable pharmacy trends, but specific drivers were not identified [42] Question: Thoughts on competitor exits and their impact on risk adjustment - Management views competitor exits as an opportunity, emphasizing disciplined pricing and effective risk adjustment [46][62] Question: Regulatory environment and potential impacts on enrollment - Management supports CMS efforts to strengthen ACA integrity but expressed concerns about the shortened enrollment period affecting consumer choice [51] Question: Expectations for risk adjustment as a percentage of premiums - Management does not anticipate significant adjustments to risk adjustment percentages at this time, but elevated claims could impact future expectations [64] Question: Drivers of SG&A performance and future expectations - Management attributed SG&A improvements to fixed cost leverage, variable cost efficiencies, and lower exchange fees, with expectations for gradual increases moving forward [74][75]

Financial Data and Key Metrics Changes - Oscar Health reported total revenue of $3 billion in Q1 2025, a 42% increase year over year [5] - Net income was approximately $275 million, a significant improvement of $98 million over the prior year period [6][20] - Earnings from operations grew by $112 million to $297 million, with an operating margin of 9.8%, an increase of 110 basis points year over year [6][18] - The medical loss ratio (MLR) increased by 120 basis points year over year to 75.4% [6][15] - The SG&A ratio improved to 15.8%, a 260 basis point improvement year over year, marking the lowest in the company's history [6][17] Business Line Data and Key Metrics Changes - The company closed the quarter with approximately 2 million effectuated members, a 41% increase year over year [7][14] - Membership growth was driven by strong retention and above-market growth during open enrollment [14] Market Data and Key Metrics Changes - Oscar Health is deepening its market presence with new partnerships, including the launch of Oscar Community Resources with Find Help, connecting members to local services [8] - The company is experiencing high levels of digital engagement across its IFP and ICRA membership [7] Company Strategy and Development Direction - Oscar Health's strategic plan focuses on top-line growth, bottom-line performance, and margin expansion [6][12] - The company is advocating for constructive solutions to strengthen the individual market and is engaged with policymakers [10][11] - Oscar aims to create a marketplace that meets consumer and employer expectations for choice, quality, and affordability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 targets, citing disciplined execution and strong growth [12][22] - The current policy environment, including proposed CMS initiatives, is viewed as positive for long-term market sustainability, despite potential enrollment constraints [10][11] - Management anticipates membership trends to increase in the first half of the year but expects a decline in the latter half due to policy changes [29] Other Important Information - The company reaffirmed its full-year guidance metrics, expecting total revenue in the range of $11.2 billion to $11.3 billion for 2025 [21] - Oscar Health's capital position remains strong, with approximately $4.9 billion in cash and investments [20] Q&A Session Summary Question: Membership expectations for the second quarter and the rest of the year - Management expects membership to trend up in the first half of the year but anticipates a decline in the latter half due to policy changes [28][30] Question: Context around grace period membership and its impact - Management indicated that the gap between effectuated and paid membership is expected to normalize, with a portion of members ending their grace period [34] Question: Utilization patterns between new and retired members - Management noted higher inpatient utilization with favorable pharmacy trends, but no specific condition was driving the inpatient increase [39] Question: Opportunities and risks around competitor exits - Management views competitor exits as an opportunity to attract members and maintain disciplined pricing in the market [42][58] Question: Regulatory environment and enrollment changes - Management supports CMS efforts to strengthen the ACA but expressed concerns about the shortened enrollment period affecting consumer shopping [48] Question: Risk adjustment expectations for 2025 - Management indicated no significant adjustments to risk adjustment payables at this time, but elevated claims could impact future percentages [60] Question: Drivers of SG&A performance - Management attributed SG&A improvements to fixed cost leverage, variable cost efficiencies, and lower exchange fee rates [70][71] Question: Valuation concerns and fraudulent member estimates - Management is conducting its own analysis regarding fraudulent members and remains committed to long-term targets despite market challenges [75] Question: CSR refund proposal and its implications - Management expressed concerns about the practical implementation of CSR refunds and recommended against moving forward with the proposal for 2026 [80]

Oscar Health, Inc. (OSCR) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.83 per share. This compares to earnings of $0.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.84%. A quarter ago, it was expected that this company would post a loss of $0.58 per share when it actually produced a loss of $0.62, delivering a surprise of -6.90%.Over the last four quarters, the company h ...

"Oscar reported strong financial results in the first quarter," said Mark Bertolini, CEO of Oscar Health. "We delivered continued top- line growth and bottom-line performance with significant year-over-year increases in revenue and net income. We continue to expect meaningful margin expansion this year as we deliver superior value to our members and partners." Oscar is reaffirming its full year 2025 outlook across all metrics as provided in its financial results press release dated February 4, 2025. First Q ...