Oscar Health previewed Q2 results and the picture is rough. Net loss came in at $228 million. Operating loss was nearly the same at $230 million. Medical loss ratio was revised higher, now projected between 86% and 87% for the full year. That is a sharp adjustment. Wakely data showed higher morbidity across the ACA exchange. Oscar’s members were sicker than forecast. Claims are heavier. Pricing was soft.
Even with that backdrop, the company lifted its revenue outlook. Full year 2025 is now expected between $12.0 billion and $12.2 billion. SG and A expense ratio is projected between 17.1% and 17.6%. Adjusted EBITDA loss is expected to come in $120 million less than operating loss. So the burn is high but still controlled.
Oscar will refile 2026 rate plans in states that cover 98% of its members. That is the play. Higher premiums. CEO Mark Bertolini said they are making the right pricing moves and staying the course. The $2.25 EPS target for 2027 remains unchanged. Bulls are holding on to that number.
Shares were $22.09 at the start of July. Now they hover near $13. That is a 39% drop. Volume spiked after Centene pulled guidance. Wells Fargo and UBS both downgraded to underweight. Barclays held a $17 target but warned about ACA subsidy exposure. About 90% of Oscar’s premium revenue comes from ACA plans. If subsidies end in December, 7.4 million people could drop off the rolls by 2030. That is the bear thesis.
But the bull case still has legs. Q1 revenue jumped 42% year over year to $3.05 billion. EPS came in at $0.92. Membership hit 2.04 million. Net Promoter Score sits at 66. Virtual urgent care is scaling. AI tools are driving down claims costs. Cash on hand is around $3 billion. Free cash flow is positive. Institutional holders own 90% of shares. Float is tight.
In New York, analysts see pricing power in complex care markets. Florida brokers say Oscar’s care routing outperforms legacy players. Texas enrollment is growing even with subsidy risk. California has already approved Oscar’s 2026 rate hike. That gives leverage.
The bear case centers on ACA instability, high loss ratios, and analyst downgrades. The bull case leans on pricing power, tech efficiency, and long-range EPS targets. If Oscar hits $2.25 in earnings by 2027, a 14x multiple puts the stock near $31. At 20x, it lands at $45. That is the path to a multi-bagger.
Next earnings call is August 6. That will confirm or crush the narrative. Until then, the trade rides on guidance, risk pools, and pricing approvals. The short term is murky. The long game is still in play.
Sources
https://finance.yahoo.com/news/oscar-health-announces-preliminary-financial-100000097.html
https://www.ainvest.com/news/oscar-health-sees-year-revenue-12b-12-2b-2507/
https://www.panabee.com/news/oscar-health-earnings-q2-2025
Disclaimer: This is not financial advice.