Core Viewpoint - Oscar Health is positioned as a contrarian investment opportunity in the health insurance sector, demonstrating strong growth and profitability, particularly in light of potential regulatory changes that could expand its market significantly [1][15]. Company Overview and Q1 2025 Performance - Oscar Health is a tech-native health insurer focusing on individual and family plans through ACA exchanges, currently operating in 18 states and insuring approximately 2 million members, representing about 1 in every 13 ACA enrollees nationwide [4]. - In Q1 2025, Oscar reported $275.3 million in net income, a significant increase from $177.4 million a year prior, with total revenue reaching $3.05 billion, reflecting a robust 42% year-over-year growth [5]. - The company achieved a record-low SG&A ratio of 15.8%, down from 18.4%, indicating improved operational efficiency under new leadership [6]. Market Opportunity Analysis - The introduction of the Choose Medicare Act proposes a Medicare Part E public option, which could significantly increase Oscar's addressable market, potentially tripling it if the legislation passes [10]. - Oscar's digital infrastructure and technology position it well to capitalize on the expected influx of consumers seeking coverage through public marketplaces [10]. Valuation Discussion - Oscar trades at 14 times projected 2027 earnings, which is considered a bargain given its high double-digit revenue growth [11]. - The company's market cap of $4.8 billion is less than 50% of its current annual revenue, suggesting a valuation disconnect compared to traditional insurers [11]. Investment Considerations - The risk-reward profile favors buyers, with the potential for Oscar's valuation to increase significantly if the public option is realized, transforming it from a $5 billion to a $15 billion company within 18 months [13]. - Even without the Medicare Part E, Oscar's compelling growth metrics and operational improvements make it an attractive investment opportunity [13][15]. - The market currently undervalues Oscar as a traditional insurer, while it operates as a technology company in the insurance space, creating a unique investment opportunity [14].