Wall Street Is Sleeping on This $4B Healthtech Disruptor
Explosive earnings, misunderstood moat, and a TAM big enough to bury the skeptics
Part 1 of 2: This deep dive covers Oscar’s business model, valuation setup, growth trajectory, and management alignment.
(Part 2 will unpack valuation targets, perception gap, bear scenarios, and my investment playbook.)
Oscar Health ( OSCR 0.00%↑ ) is a tech-driven health insurance company aiming to reinvent the broken U.S. healthcare system. Founded in 2012 by Mario Schlosser, Kevin Nazemi, and Josh Kushner, Oscar blends software, data, and design to offer a radically simplified insurance experience, complete with a proprietary tech stack, member-focused mobile app, and personalized virtual care.
Josh Kushner, Oscar’s co-founder, is also the founder of venture capital firm Thrive Capital and the younger brother of Jared Kushner, former White House advisor. But make no mistake Josh’s track record as an investor speaks for itself. Through Thrive, he was an early backer of Instagram, Stripe, OpenAI, and Robinhood. His fingerprints are all over the modern tech landscape, and Oscar is arguably his most ambitious bet yet to disrupt one of the most entrenched, politically entangled industries in America.
Today, Oscar operates primarily in the ACA individual and family plan (IFP) market, where it serves over 2 million members and holds a top 3 market share in key states. After years of burning cash and battling skepticism, the company has now delivered back-to-back EPS beats and shown signs of a credible path to profitability. With accelerating volume, improving unit economics, and an underappreciated B2B tech licensing business (+Oscar), Oscar Health may be on the verge of rewriting its story and Wall Street hasn’t caught up yet.
Basic Info
Ticker / Company Name: OSCR 0.00%↑ / Oscar Health, Inc.
Market Cap: $4.2 B (July 2025)
Sector / Industry: Healthcare – Health Insurance (Insurtech)
Country / Exchange: United States / NYSE
Stock Type: High Growth Turnaround (formerly unprofitable insurtech now achieving profitability)
Narrative Overview
Positives (The “Goods”): Oscar Health has rapidly grown its membership and revenue (42% YoY in Q1 2025) while turning profitable. Its tech-driven model yields a low administrative cost (record-low 15.8% SG&A ratio in Q1), and management expects meaningful margin expansion in 2025. The company’s strong capital position ( $2.26 B cash, with $907 M excess capital in subsidiaries) provides a cushion. Oscar’s customer-facing technology (mobile app, virtual care) is best-in-class – the app is rated 4.9/5 on iOS and 4.7/5 on Google Play driving high member engagement (e.g. 77% of chronic patients interact with care teams) and a high NPS of 66. These strengths position Oscar as one of the fastest-growing players in the individual insurance market, with a differentiated, tech-enabled member experience.
Negatives (The “Bads”): Oscar faces customer satisfaction challenges despite its slick app. It receives 3.5X more consumer complaints than an average insurer of similar size, and earned the worst plan quality rating on HealthCare.gov among major insurers. Recurring complaints include poor customer service, billing issues, and difficulty finding in-network doctors. Oscar’s premiums tend to be expensive relative to peers in many markets, which, combined with narrower networks (limited doctors), can hurt its value proposition. The company has limited product scope – it exited Medicare Advantage and pulled back from several states (e.g. CA, CO, AR) to stem losses. This strategic retrenchment improved finances but raises questions on long-term growth avenues beyond its ACA (Affordable Care Act) niche. Regulatory risks are significant: Oscar’s business relies on the ACA framework (e.g. premium subsidies, risk adjustment). Upcoming policy changes such as shorter enrollment windows and potential expiration of enhanced subsidies could shrink enrollment by an estimated 3–9%, a headwind for 2026. Oscar’s valuation is also elevated on an earnings basis (trailing P/E 35) vs. established insurers (many trade at single-digit P/Es), reflecting high expectations.
Neutral/Uncertain: The Q1 2025 earnings beat (EPS $0.92 vs $0.81 est.) was driven by a one-time surge in membership (post Open Enrollment) and unprecedented SG&A efficiency, while the medical loss ratio ticked up with a risk adjustment hit. These factors may normalize in later quarters (management reaffirmed full-year guidance assuming membership will fall to 1.8M by YE 2025 and higher cost ratios). Thus, whether Oscar can sustain the Q1 level of profitability is a key uncertainty – upcoming quarters will reveal if the margin gains (from fixed-cost leverage and cost controls) are durable or seasonally skewed. Oscar’s competitive landscape is in flux: one overlapping competitor will exit ACA markets in 2026, which presents an opportunity to capture members, but also underscores how challenging the market can be.
1. Management Alignment
Insider Ownership: 24 % when you include all Thrive Capital vehicles controlled by co-founder Josh Kushner, one of the largest insider stakes among publicly traded insurers. That level of insider skin in the game, combined with equity heavy comp for the operating exec team, materially strengthens alignment with outside shareholders.
Equity-heavy Compensation: Oscar uses stock compensation liberally (Q1 2025 stock-based comp $25 M), typical for tech-oriented firms. This rewards management for stock performance, though it also dilutes shareholders (19% YoY increase in shares outstanding). The new CEO’s turnaround plan success (returning Oscar to profit) suggests management is executing with an ownership mindset, even if direct holdings are limited.
Insider Buying: There have been no notable open-market insider purchases recently; rather, insider activity has been mixed with small sales. The lack of aggressive insider buying at current levels (after a >+200% stock rise from 2022 lows) may imply insiders view the stock as more fairly valued now. However, there’s no indication of insider disengagement – key leaders remain invested in Oscar’s long-term strategy, and no major departures have occurred.
Capital Allocation History: Management has demonstrated disciplined capital allocation in the past two years by prioritizing profitability over growth-at-all-costs. They exited unprofitable segments (e.g. ceased Medicare Advantage offerings after 2024) and pulled out of certain states to focus on core markets. This right-sizing helped Oscar achieve positive net income in 2024 and Q1 2025. Oscar has kept debt low (Debt/Equity 0.27) and instead funded growth via equity raises – a prudent approach given the company’s early-stage losses. Now that operations are cash-generative (Q1 operating cash flow $879 M), capital allocation can shift toward reinvestment in technology and potentially building reserves or repaying debt. Overall, management has shown a willingness to make tough decisions (retrenching markets, forgoing near-term revenue) to ensure the company’s financial sustainability – a positive for alignment with long-term shareholders.
2. EPS Trend
3–5Y Historical EPS: Oscar’s earnings per share have improved dramatically from deep losses to positive earnings. After its 2021 IPO, Oscar posted large negative EPS in 2021 and 2022 (net loss of $571 M in 2021, -$3.07 EPS; and similar losses in 2022) as it scaled. 2023 saw improvements but was still a net loss. In 2024, Oscar achieved its first annual profit: $25.4 M net income, or $0.10 EPS – a $296 M YoY improvement. T
This positive inflection continued into Q1 2025 with EPS of $0.92 (vs $0.62 in Q1 2024). The trailing-12-month EPS is now firmly positive (TTM EPS $0.37, reflecting the back-half of 2024 plus Q1 2025). In short, EPS has gone from negative to +$0.10 in 2024 and TTM $0.40, indicating a sharp upward trend as the business turned the corner.
2Y Forward EPS Estimates: Consensus expects EPS of $0.67 in 2025 and $1.06 in 2026. Notably, the 2025 estimate (>$0.60) is lower than the annualized run-rate of Q1 – reflecting analysts’ caution that later quarters will be weaker. In fact, the current 2025 EPS consensus decreased from $0.69 a month ago after Oscar management reiterated conservative guidance. For 2026, the slight EPS dip to $1.06 suggests expectations of higher costs or membership decline (perhaps due to subsidy uncertainty in 2026). However, these estimates could prove low if Oscar sustains operational momentum. Management’s confidence in “continued profitability and margin expansion” suggests internal targets may outpace current consensus. If Oscar executes well, forward EPS could be revised upward – indeed, earlier this year (Feb 2025) analysts raised EPS forecasts by 34% following Oscar’s guidance initiation. Overall, the EPS trend is strongly upward, though Street forecasts embed a buffer for potential volatility in this young insurer’s results.
3. Earnings Surprise History
Beat/Miss %: Oscar’s quarterly results have been volatile relative to expectations, but recent momentum is positive. Q1 2025 was a solid beat (EPS $0.92 vs $0.81 est, +13.6% surprise; revenue $3.05B vs $2.84B est, +6.3% beat). This follows a mixed 2024: in Q4 2024, Oscar slightly missed EPS (–$0.62 vs –$0.60 est) and revenue ($2.39B vs $2.43B est), whereas Q3 2024 saw a revenue beat but EPS miss, and Q2 2024 delivered beats on both top and bottom line (prompting a guidance raise at that time). Over the last four quarters, Oscar beat EPS estimates 75% of the time (3 out of 4 quarters) – often by large margins when it beats. The stock has reacted strongly: for instance, shares jumped +15.6% on the Q1’25 beat.
Beat Magnitude: The magnitude of surprises has widened recently. Q1 2025’s EPS beat (13% above consensus) and net income $98M higher YoY underscore Oscar’s tendency to outperform internal targets early in the year. Historically, surprises were partly driven by unpredictable medical cost development and enrollment swings. The Q1 beat came from higher-than-expected membership and strong cost control: revenue was 6% above forecast and the operating margin was 9.8%, 110 bps higher YoY despite a slightly worse MLR. This suggests analysts under-modeled Oscar’s fixed-cost leverage and perhaps overestimated expenses. Conversely, in late 2022 and early 2023, Oscar had downside surprises when medical costs ran higher than anticipated (e.g. a tough Q3 2022 led to stock plunging to $2). Now, with Oscar consistently executing, the bias has turned to upside surprises. Bottom line: Oscar has developed a pattern of conservative guidance and beat-and-maintain results, increasing the chance for “beat-and-raise” quarters ahead (see Tier 2, #11 for more on forward expectations).
4. Valuation
Oscar’s valuation captures a company in the early innings of profitable scale up:
Trailing P/E 35 (at a $16 share price) and forward P/E 24 (on 2025E EPS of $0.67). The premium multiple reflects a still small earnings base yet outsized growth runway.
EV/EBITDA 10.3X on trailing numbers, with an enterprise value of $2.2 B against TTM EBITDA north of $200 M, much less demanding than the headline P/E.
Cash flow optics are eye-catching: Price/FCF 3.5X and EV/FCF 2X, translating to a 28 % free-cash-flow yield. The disconnect stems from Oscar’s front-loaded premium inflows and risk-adjustment timing, which make operating cash far richer than GAAP earnings.
Investors should apply a healthy dose of skepticism to that FCF headline, insurers must warehouse capital for future claims but the numbers nevertheless underscore Oscar’s powerful internal cash engine as it scales.
Relative to Peers & History
Earnings multiples: Legacy managed-care names such as Centene (8X forward P/E) and Molina (11X) still enjoy single-digit valuations thanks to mature, mid-single-digit growth. Oscar trades at 35X trailing and 24X forward earnings—rich at first glance, but its five-year EPS CAGR is projected around 45 %, driving a PEG < 0.6. In other words, investors are paying up for acceleration, not today’s margin profile.
Sales multiples: Oscar’s Price/Sales 0.4 and EV/Sales 0.2, almost identical to Centene/Molina in the 0.2–0.3 range. The market is therefore valuing each dollar of Oscar’s revenue on par with the incumbents despite Oscar growing 3–4X faster, a sign lower net margins (1–2 % vs. peers’ 4–5 %) are the chief discount factor.
Cash-flow & EBITDA comps: At 10X EV/EBITDA, Oscar sits above traditional peers (Centene 3X, Molina 6X) but well below loss-making insurtech names, whose EV/EBITDA is effectively infinite. Its rock-bottom EV/FCF 2X highlights cash generation few growth peers can match.
Against other insurtechs: Clover Health trades around 1X sales and still hovers at break even. Lemonade—outside health but a useful yardstick—commands 5X sales while deeply unprofitable. By contrast, Oscar is already profitable and priced at 0.4X sales, positioning it as the value play of the disruptor set.
Historical lens: The stock debuted above 22Xsales in 2021, crashed to 0.1X at the 2022 trough, and has since rebounded into today’s 0.4–0.5X zone—discounting solid growth but not yet “maturity” margins.
Takeaway: Oscar looks expensive on earnings, cheap on revenue, and downright compelling on free cash flow. If management keeps beating estimates and nudging margins higher, the forward P/E should compress rapidly—allowing the share price to grind higher even without multiple expansion.
5. Growth Potential
Revenue CAGR: Oscar’s revenue growth has been robust (albeit uneven due to strategy shifts). From 2018–2021, revenues grew 50%+ annually as Oscar expanded footprints. 2021–2023 saw 71% cumulative revenue growth (Sales $5.4B in 2021 to $9.18B in 2023). Full-year 2024 revenue was $10.08B (+9.9% YoY, reflecting the company’s exit from some markets). Now growth is re-accelerating: Q1 2025 revenue jumped +42% YoY to $3.05B, driven by a 41% surge in membership. Consensus forecasts a more moderate 9% revenue CAGR over the next 3 years, aligning with management’s 2025 guidance of $11.2–11.3B (only 11% YoY growth). This low guidance reflects expected mid-year attrition and the end of continuous Special Enrollment Periods. However, Oscar’s TAM (see #9) suggests revenue could grow faster with market share gains or new market entries. In summary, past growth was very high, and while near-term growth is guided conservatively (single-digit), there remains upside if Oscar capitalizes on opportunities (new partnerships, competitor exits).
EPS CAGR: Given Oscar’s swing to profitability, EPS growth is extremely high off the base. From 2023 (negative) to 2024 ($+0.10) and 2025E ($+0.61) is essentially an inflection from losses to $0.60+. Analysts expect 46% annualized EPS growth going forward. Importantly, Oscar’s operating leverage means EPS could scale rapidly: once fixed costs are covered, additional revenue (or cost cuts) drops disproportionately to the bottom line. For instance, net margin improved from 1.2% in 2024 to 9% in Q1 2025. If Oscar can sustain even a 3–5% net margin on growing revenue, EPS will compound significantly. However, EPS could be lumpy due to medical cost variability. Over 3–5 years, maintaining a 40–50% EPS CAGR is challenging; the current trajectory assumes Oscar moves from $0.6 EPS to $1.5+ in a few years. That might require expanding margins into the high single digits and continued membership growth, which is feasible if execution is strong.
FCF CAGR: Free cash flow has turned positive with profitability and improved working capital dynamics (Q1 2025 operating cash flow was +$879M thanks to premium inflows and risk adjuster timing). While GAAP net was small in 2024, Oscar’s FCF in 2024 was substantially higher (P/FCF 3.5 implies hundreds of millions in FCF). We expect FCF to grow with earnings, but not linearly – regulatory capital needs and timing of payments (risk adjustment, claims) can cause big swings. Nonetheless, Oscar’s model of collecting premiums up front gives a natural FCF boost as it grows. Over the next few years, if net income rises as projected, FCF should roughly track or exceed net income (absent major reserve builds). Thus, an implied FCF CAGR could also be very high (50%+ from 2024 base). This supports Oscar’s ability to self-fund growth and perhaps eventually return capital (though near-term reinvestment is more likely).
Gross Margins: In insurance, “gross margin” can be viewed as 1 – medical loss ratio (MLR). Oscar’s MLR has improved with scale and pricing discipline: from 89% in 2021 to 82% in 2023 (a 7-point improvement). In Q1 2025, MLR was 75.4%, meaning a gross margin of 24.6% on premiums – a strong level. However, management guides full-year 2025 MLR at 80.7–81.7%, implying gross margin 18–19% (they expect higher claims cost as the year progresses). Historically, Oscar’s gross margin was negative when MLR exceeded 100% (in early years), but now it consistently generates a margin on insurance. Going forward, there’s room for margin expansion via care management and pricing: Oscar’s target is likely mid-70s MLR (25% gross margin) or better. Peers like Molina often operate 85% MLR (15% margin), so Oscar’s recent 75% is excellent – though partly aided by lower utilization in Q1 and favorable pharmacy costs. Sustaining sub-80% MLR will be crucial for profit growth. Overall, Oscar’s gross margin trend is positive (improving), but we anticipate some normalization around 80% MLR near term, with incremental gains longer term through tech-driven efficiency in care delivery.
6. Blow-Up Risk
Debt Levels: Oscar carries low debt and has low financial risk. Debt/Equity is only 0.22, and interest coverage is a comfortable 7×. The company’s senior notes (7.25% due 2031) indicate no distress. With nearly $2.26B in cash and equivalents on the balance sheet as of Q1 2025, Oscar is net debt negative – Enterprise Value ($2.25B) is far below Market Cap ($4.1B), indicating substantial net cash. This war chest reduces blow-up risk from liquidity issues. Additionally, insurance subsidiaries have $1.5B capital & surplus (with $907M above regulatory minimum) – Oscar is well-capitalized to absorb shocks. In short, debt is not a concern; Oscar’s risk is operational, not balance-sheet leverage.
Governance or Legal Issues: Oscar has had no major governance scandals or fraud cases. The board includes reputable figures (e.g. Kevin Campbell of CapitalG/Google, and Mario Schlosser, co-founder). However, Oscar is subject to regulatory audits and compliance requirements given its insurance operations. One area of legal risk is regulatory compliance: state insurance regulators oversee solvency and consumer protection. Any missteps (e.g. under-reserving, network adequacy violations) could lead to sanctions. So far, Oscar’s regulatory track record is clean, though its “worst in class” consumer satisfaction rating on HealthCare.gov suggests a need to improve service quality (to avoid potential state regulatory scrutiny over complaints). The company is also involved in industry lobbying – e.g. advocating against short enrollment periods – but that’s standard. Governance risk appears low: Oscar’s majority voting power was initially with founders via dual-class shares, but any such structure is now likely moot after dilution. No recent shareholder litigation of note.
Industry Disruption Risk: Ironically, Oscar is a disruptor in health insurance, so the main disruption risk is the incumbents fighting back or market changes. Large insurers (UnitedHealth, Anthem, etc.) could leverage their scale and data to replicate Oscar’s tech features, eroding its edge. There’s also risk from insuretech competitors: though some (Bright Health, Friday Health) failed or exited, others like Clover Health (Medicare-focused) or new entrants could encroach. That said, Oscar’s focus on the individual ACA market has a high barrier to entry now (due to risk adjustment and pricing expertise honed since ACA’s inception). The bigger disruption risk is regulatory: if policies change (e.g. drastic changes to ACA or risk adjustment formula), the economics could swing. For instance, a reduction in risk-adjustment transfers could disadvantage Oscar if it enrolls higher-risk members. Or if the enhanced subsidies expire end of 2025, the individual market could contract significantly, “disrupting” Oscar’s growth. On the technology front, there is some risk that new healthtech (AI-driven care or other models) could obsolete parts of Oscar’s model, but more likely Oscar will adopt such tech itself (it’s already using AI for member support).
Overall industry disruption risk: medium – external changes (policy, competition) are the key watchpoints, but Oscar is comparatively agile and is part of the disruptive wave changing how insurance is delivered.
7. Technical Setup
Price vs. 50/150/200DMA: Oscar’s stock has been in a strong uptrend. As of early July 2025, OSCR trades around $16 (after a pullback) – this is +10% above its 200-day moving average ($15.70) and 10% above the 150DMA, but slightly below the 50DMA ($17.56). The recent dip (the stock fell 19% in one week, likely on sector news) put RSI 47, relieving prior overbought conditions. Earlier, the stock hit a 52-week high of $23.79 after the Q1 earnings spike, far above its moving averages, indicating an overextension that has since corrected.
Now the technical picture is neutral-to-bullish: price still above long-term support (200DMA upward sloping +$5% YTD), but below short-term trend (50DMA) as it consolidates. This could be seen as a healthy retracement in an uptrend – the stock is up 16% YTD and +265% from 2022 lows.
Trend Stage: After a brutal decline post-IPO (from $37 in 2021 to $2 in late 2022), Oscar staged a major reversal in 2023, finishing +272% that year. The trend entered a “Stage 2” uptrend (as per Stan Weinstein’s stages) in mid-2023 when it broke above the 30-week MA around $6-8. In 2024, momentum accelerated with improving fundamentals (stock +47% in 2024). The surge to $23 in May 2025 put OSCR near overbought territory, and indeed it has corrected 30% from that high. It’s now arguably in a consolidation within the uptrend – potentially forming a higher base around $15–17. Volume spiked during the May rally (huge volume on earnings beat) and again on recent sell-off, suggesting active trading interest. The short-term trend is in flux (the stock fell below its 20-day SMA, now trying to stabilize), but the primary trend remains upward (200DMA support).
8. Total Addressable Market (TAM)
Size: Oscar’s core market is individual and small-group health insurance, primarily via the ACA exchanges. The current ACA marketplace enrollment for 2025 is 24.2 million people (across federal and state exchanges). This implies a premium TAM of roughly $120–150+ billion (assuming $5k–$6k annual premium per enrollee). Oscar’s Q1 membership of 2.04 million gives it 8% share of the ACA market by lives. Beyond the exchanges, Oscar sees a far larger TAM if employer-based coverage shifts to individual markets. There are 163 million Americans with employer-sponsored insurance; Oscar specifically cites 75 million SMB (small-to-mid size business) employees whose coverage could transition to ACA via ICHRA mechanisms. Including dependents, the potential lives that could eventually be in individually-chosen plans is enormous – on the order of 100 million+ in the U.S. This would correspond to a TAM well into the hundreds of billions of dollars (the U.S. health insurance industry is $1+ trillion across all segments). In summary, Oscar’s current serviceable market (ACA states it operates in) is tens of billions in premiums, and the total addressable if regulatory changes allow is an order of magnitude higher.
Serviceable vs. Addressable: Today, Oscar is only present in 18 states for 2025 plans (after exiting a few states, it still covers major markets like FL, TX, NY, CA (was in CA but exited in 2023), etc.). So its serviceable obtainable market is smaller than total U.S. ACA. Even within its states, Oscar doesn’t always sell statewide – it focuses on specific counties (504 counties in 2025). Thus, Oscar’s near-term SAM might be, say, 10 million ACA enrollees in those areas (for perspective, Florida alone had 3 million enrollments, Texas 2 million, etc., and Oscar operates in large portions of those). There is ample room to grow share in current markets or expand to new states. Oscar likely will cautiously expand to new states once confident in profitability (e.g., it has announced some expansions like into new metro areas for 2025). Meanwhile, the broader addressable employer/ICHRA segment remains untapped – Oscar is laying groundwork (advocacy, product development) but that TAM is not yet “serviceable” since relatively few employers have adopted ICHRA at scale. If and when ICHRA adoption grows (and potentially if tax credit parity is achieved), Oscar could start capturing some of that TAM, either directly or via partnerships. The company’s investor day materials illustrate a vision of “total individual TAM” comprising current ACA lives + employer lives migrating. In summary, Oscar’s serviceable market (ACA in its states) is large enough to support multi-year growth (millions more members). The truly addressable market (if including structural shifts) is transformatively large, but timing is uncertain. Importantly, Oscar’s model (tech platform, direct-to-consumer branding) is built to scale in an expanded market, suggesting an upside optionality if TAM opens up.
End of Part 1 — stay tuned for Part 2.
Disclosure
I currently hold a long position in Oscar Health (OSCR) at the time of writing. This write-up reflects my personal opinion and analysis based on publicly available information, regulatory filings, and financial modeling. It is intended strictly for informational and educational purposes and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities.
Investing in equities—especially in high-growth, regulatory-dependent sectors—carries substantial risk, including the risk of total capital loss. Always perform your own due diligence and consult a registered financial advisor before acting on any investment ideas.
I reserve the right to buy, sell, or adjust my position in any security mentioned—including Oscar Health—at any time without notice. This content is designed for a financially sophisticated audience. Use it as one input among many—not as gospel.
I love your insight
Great deep dive