# OSCR — Oscar Health, Inc.

## Company & Research Metadata

- **Company:** Oscar Health, Inc.
- **Ticker:** OSCR
- **Exchange:** NYSE
- **Sector / Industry:** Financials / individual health insurance
- **Template version:** 2.7
- **Research date:** 2026-10-21
- **Valuation / score price snapshot:** $32.41 — 2026-11-03 regular-session close, America/New_York
- **Tracking tier:** Primary Watchlist
- **Owned:** No
- **Primary operating period reviewed:** Q2 2026
- **Historical period reviewed:** TTM, FY 2025, FY 2024; latest balance-sheet date shown below
- **Latest investor presentation reviewed:** Results release and associated financial tables; no separate slide deck materially used
- **Latest earnings call reviewed:** Q2 2026, complete material Q&A
- **Latest post-earnings management commentary reviewed:** No separate later management presentation incorporated

- **Price snapshot date:** 2026-11-03

- **Price snapshot time / timezone:** Regular-session close, America/New_York (including exchange half-days)
- **Competitor / analyst-Q&A audit:** 2026-10-28; original operating, price and valuation snapshots retained.

## What's Changed Since Previous Review

**Current Review:** 2026-10-28

**Previous Review:** 2026-10-21

**Update Trigger:** Competitor relevance and analyst-Q&A correction

| Area | Previous View | Current View | Investment Impact |
|---|---|---|---|
| Competition | Preceding operating and comparable-company classifications | Product/customer/geographic boundaries corrected; direct rivals separated from substitutes, partners and valuation anchors | Corrects the competitive comparison; does not by itself re-underwrite the valuation |
| Analyst questions | Prior source-linked Q&A summaries | Complete questions and sentence-form management answers; all 11 existing rows retained | Improves readability while preserving the recorded exchange meaning |
| Valuation and scores | Approved operating/price snapshots, scenarios, scores and decisions | Preserved | No price refresh, rerank or change to valuation assumptions in this correction pass |

**Thesis:** No new fundamental thesis determination is made in this correction pass. The prior investment decision is preserved; the corrected competitive scope should govern the next substantive review.

## Investment Snapshot

| Metric | Current View |
|---|---|
| Price Snapshot | $32.41 — 2026-11-03 regular-session close, America/New_York |
| Rating / Zone Status | Avoid |
| Bear / Base / Bull Fair Value | $3.84 / $25.63 / $57.66 |
| Scenario Probabilities | 35% / 45% / 20% |
| Probability-Weighted Fair Value | $24.41 |
| Probability-Weighted Expected Return | -24.7% |
| Bear-Case Return | -88.2% |
| Strong Buy Zone | ≤ $4.22 |
| Buy Zone | >$4.22–$19.53 |
| Avoid Chasing Above | > $27.12 |
| Quality Score / Tier | 61.6 / Tier C |
| Opportunity Score / Rank | 23.9 / #73 of 76 |
| Risk Level | High |
| Tracking / Ownership | Primary Watchlist / Not Owned |

**Decision rationale:** OSCR is **Avoid** at $33.66, with -27.5% probability-weighted upside and -88.6% bear-case return. Better pricing and operating execution can produce attractive profits in a growing individual market. Confidence is 35/100 because the earnings conversion, competitive and capital assumptions below remain conditional.

## Investment Thesis

Better pricing and operating execution can produce attractive profits in a growing individual market. Q2 revenue reached $4.88 billion and the medical loss ratio improved to 79.2%, following a difficult prior-year period. These results are encouraging but cannot be annualized without considering seasonality, risk adjustment and policy changes. The investment is fundamentally an underwriting and regulatory case.

### What the Market May Be Mispricing

| Debate | Research judgment |
|---|---|
| Ultimate medical costs and pricing adequacy | Better pricing and operating execution can produce attractive profits in a growing individual market. |
| ACA subsidies, regulation and risk adjustment | Medical loss ratio, administrative ratio, risk-adjustment accuracy, member retention and pricing adequacy determine unit economics. |
| Full-year profitability and statutory capital | Q2 adjusted EBITDA was about $415 million, but insurer cash inflows include premiums and settlement timing that are not freely distributable. |

## Business Overview

Oscar provides individual and family health insurance, primarily through the Affordable Care Act marketplace, with technology and member-service capabilities supporting plan operations. Premium revenue funds medical claims, administration and required insurance capital. Membership growth depends on pricing, distribution, subsidies, network design and regulatory rules. Risk-adjustment receivables and liabilities materially affect comparisons and cash timing.

### Business Takeaway

Oscar provides individual and family health insurance, primarily through the Affordable Care Act marketplace, with technology and member-service capabilities supporting plan operations. Medical loss ratio, administrative ratio, risk-adjustment accuracy, member retention and pricing adequacy determine unit economics.

## Industry, TAM & Market Share

The individual market can benefit from labor-market flexibility and employer coverage changes. Subsidy policy, eligibility enforcement and insurer participation can change the market abruptly. Total insured lives should not be treated as a stable TAM independent of policy and affordability.

### Market-Share Analysis

Comparable same-definition share data for the subject and its principal rivals were not established. TAM estimates and company-specific volume measures are not treated as directly comparable market shares. The positioning analysis below is more reliable than a table of unmatched percentages.

#### Competitive Scale / Position

| Company / Platform | Primary Position | Relative Scale | Growth Direction | Investment Relevance |
|---|---|---|---|---|
| Centene — Ambetter (CNC) | Direct: ACA individual-market plans in overlapping counties | Product scope; no matched operating-scale series | Competes where plans are offered together | Customer choice in the stated segment only |
| Molina (MOH) | Direct segment: exchange coverage where offered | Product scope; no matched operating-scale series | Verify plan-year and county availability | Customer choice in the stated segment only |
| Local Blue Cross Blue Shield plans | Direct: individual-market coverage in overlapping counties | Product scope; no matched operating-scale series | County-level premiums and networks determine competition | Customer choice in the stated segment only |

### Industry Takeaway

Total insured lives should not be treated as a stable TAM independent of policy and affordability. The base case requires evidence of profitable adoption within that market.

## Customer Economics

Medical loss ratio, administrative ratio, risk-adjustment accuracy, member retention and pricing adequacy determine unit economics. Growth is valuable only when premiums cover ultimate medical costs and required capital. A favorable first half can be offset by later claims development or adverse risk adjustment.

### Customer-Economics Takeaway

The economic test is Full-year profitability and statutory capital. A favorable first half can be offset by later claims development or adverse risk adjustment.

## Competitive Landscape & Moat

### Competitive Landscape

The same member must be able to choose the competing ACA plan in the same county and plan year. National managed-care scale does not establish directly comparable exchange economics.

| Competitor | Market Share | Positioning | Advantages vs. Company | Disadvantages vs. Company | Current Direction |
|---|---|---|---|---|---|
| Centene — Ambetter (CNC) | No consistent comparable series | Direct: ACA individual-market plans in overlapping counties | Exchange-plan distribution and networks | Consolidated Medicaid economics are not an ACA plan proxy | Competes where plans are offered together |
| Molina (MOH) | No consistent comparable series | Direct segment: exchange coverage where offered | Managed-care operations and provider relationships | Medicaid-heavy group mix differs from Oscar | Verify plan-year and county availability |
| Local Blue Cross Blue Shield plans | No consistent comparable series | Direct: individual-market coverage in overlapping counties | Local provider networks and brand recognition | Separate regional insurers have different pricing and scale | County-level premiums and networks determine competition |

### Moat Assessment

Technology, service and distribution offer differentiation, but do not create an impregnable underwriting moat. Network access, pricing and regulatory execution remain central. Larger insurers have substantial scale and negotiating power.

**Moat direction:** Stable — an analytical judgment about product and distribution economics, not a measured market-share claim.

### Competitive Takeaway

Technology, service and distribution offer differentiation, but do not create an impregnable underwriting moat. The direct rivals determine commercial pressure; diversified or sector anchors provide valuation context and are not substitutes for direct competition.

## Financial Profile

### Historical Financials

Financial reporting periods follow the issuer's fiscal year: completed FY rows plus standalone current-year quarters and cumulative H1/9M for FY2026. Revenue, FCF and SBC are flows; cash is a period-end balance. FCF = operating cash flow minus property/equipment capex from SEC company facts; quarterly FCF after Q1 and any quarterly SBC derived from YTD are visibly marked. Missing values are N/D, not zero. Unit: USD millions. Data extracted from SEC-tagged filings as of 2026-11-07. Company-specific FCF definitions and acquisition effects may require further reconciliation.

| Period | Revenue | Growth | Gross Margin | Operating Margin | FCF | FCF Margin | SBC | Diluted Shares | Cash | Debt |
|---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---:|
| FY2024 | 9,178 | 56.54% | N/A | 0.62% | 950.3 | 10.36% | 109.82 | 266 | 1,527 | 373.75 |
| FY2025 | 11,701 | 27.50% | N/A | -3.39% | 1,058 | 9.05% | 87.65 | 262 | 2,774 | 498.8 |
| Q1 FY2026 | $5.718 | N/D | N/D | 12313.5% | $2,610.186 (derived: CFO - capex) | 45648.6% | $15.969 | 329.751 | $4,805.139 | N/D |
| Q2 FY2026 | $6.095 | N/D | N/D | 6376.3% | $2,080.583 (derived: current YTD - prior YTD) | 34135.9% | $20.654 (derived: current YTD - prior YTD) | 333.432 | $4,075.612 | N/D |
| H1 FY2026 | $11.813 | N/D | N/D | 9250.1% | $4,690.769 (derived: CFO - capex) | 39708.5% | $36.623 | 331.292 | $4,075.612 | N/D |
| Q3 FY2026 | $6.295 | N/D | N/D | 2827.9% | −$1,211.896 (derived: current YTD - prior YTD) | -19251.7% | $22.291 (derived: current YTD - prior YTD) | 346.457 | $4,466.858 | N/D |
| 9M FY2026 | $18.108 | N/D | N/D | 7017.6% | $3,478.873 (derived: CFO - capex) | 19211.8% | $58.914 | 339.281 | $4,466.858 | N/D |

### Financial Takeaways

Q2 adjusted EBITDA was about $415 million, but insurer cash inflows include premiums and settlement timing that are not freely distributable. Regulatory capital and claims reserves must be preserved. The model uses sustainable EPS rather than capitalizing standardized FCF or treating all insurance cash as surplus.

Premium float, risk-adjustment settlements and claims timing inflate or reverse reported operating cash. CFO-minus-capex is not distributable insurer cash. Statutory capital, medical losses and sustainable earnings constrain valuation.

**Financial direction:** Mixed — assess the reported trend alongside dilution and the balance sheet.

## Management & Capital Allocation

Mark Bertolini brings industry experience and has improved operating focus. Guidance credibility should be assessed across full underwriting years, especially after sharp changes in claims experience. Monitor reserve development, risk-adjustment estimates and growth-related capital requirements.

### Management Takeaway

Monitor reserve development, risk-adjustment estimates and growth-related capital requirements.

## Valuation

### Current Valuation

| Metric | Value |
|---|---|
| Price Snapshot | $32.41 — 2026-11-03 regular-session close, America/New_York |
| Market Capitalization | $10.38B |
| Enterprise Value | N/A — not used; see capital/settlement accounting discussion |
| Trailing P/E | 17.64 |
| Provider forward P/E | 18.47 |
| P/B | 5.06 |

### Comparable Company Analysis

| Company | Relevance | Public / Private | Forward P/E | P/B | Growth / Margin / Risk Context |
|---|---|---|---|---|---|
| OSCR — Oscar Health, Inc. | Subject company | Public | 18.47 | 5.06 | individual health insurance; 3Y revenue-growth estimate 27.77%; operating margin 4.11% |
| CNC — Centene | Direct Ambetter exchange segment; Medicaid-heavy group multiple | Public | 15.21 | 1.55 | managed care and exchange insurance; 3Y revenue-growth estimate 4.30%; operating margin 1.86% |
| MOH — Molina | Direct only where exchange plans overlap; different group mix | Public | 31.22 | 2.74 | government and exchange health insurance; 3Y revenue-growth estimate 5.52%; operating margin 0.70% |
| Local Blue Cross Blue Shield plans | Direct: individual-market coverage in overlapping counties | Operating alternative / no standalone security | N/D — no matched snapshot collected | N/D — no matched snapshot collected | County-level premiums and networks determine competition |

**Comparable takeaway:** The same member must be able to choose the competing ACA plan in the same county and plan year. National managed-care scale does not establish directly comparable exchange economics. Quoted multiples retain their original dated snapshot; missing matched multiples are not estimated. Consolidated parent multiples do not isolate the competing product. No mechanical peer average is used.

The base terminal P/E is 16×, versus the provider's current forward P/E of 18.47×. Holding that quoted multiple constant on this model's 2029 EPS gives an illustrative present value of **$29.58**, versus the central base FV of **$25.63**. Earnings definitions differ, so this is a sensitivity check; it makes the dependence on a rerating or derating explicit.

### Valuation Scenarios

| Scenario | Key Assumptions | Fair Value | Probability | Probability Rationale | Return From Price Snapshot |
|---|---|---|---|---|---|
| Bear | 3Y revenue CAGR -2%; sustainable 2029 EPS $0.60 after compensation; 10× P/E; 16% discount rate; Policy or claims deterioration constrains 2029 EPS to $0.60. | $3.84 | 35% | Execution, financing or competitive setbacks remain credible | -88.2% |
| Base | 3Y revenue CAGR 12%; sustainable 2029 EPS $2.50 after compensation; 16× P/E; 16% discount rate; Adequate pricing and operational discipline produce $2.50 of 2029 EPS. | $25.63 | 45% | Most likely operating trajectory, requiring measurable progress | -20.9% |
| Bull | 3Y revenue CAGR 22%; sustainable 2029 EPS $4.50 after compensation; 20× P/E; 16% discount rate; A durable individual-market expansion produces $4.50 of 2029 EPS. | $57.66 | 20% | Successful product conversion and operating leverage; not assured | +77.9% |
| **Probability-Weighted** | Sum of each scenario value × its probability | $24.41 | **100%** | Judgmental scenario probabilities | -24.7% |

### Valuation Takeaway

- **Primary valuation method:** Present value of sustainable 2029 equity earnings × scenario P/E, plus assumed interim dividends. The three-year discount horizon approximates late-2029 earning power.
- **Cross-check methods:** Direct competition, quoted peer multiples, current cash conversion, and the separate revenue/share/net-margin bridge in [the valuation workpaper](../valuation/watchlist_models_2026-10-21.md).
- **Key valuation dependencies:** Ultimate medical costs and pricing adequacy; ACA subsidies, regulation and risk adjustment; Full-year profitability and statutory capital. All forward figures are independent research assumptions, not company guidance or consensus.
- **Valuation confidence / Risk Level:** 35/100 / High. Scenario values are sensitive to sustainable earnings and terminal multiples.
- **Margin-of-safety conclusion:** Avoid at $33.66. New-file boundaries use Strong Buy = min(P/W FV ÷ 1.5, 1.1 × bear FV), Buy upper = P/W FV ÷ 1.25, Avoid above = P/W FV ÷ 0.90. Returns are to present fair value, not annualized returns or price targets for a particular date.

## Analyst Questions

The table consolidates related questions and follow-ups from each material participant in the complete call.

| Analyst / Firm | Core Question | Management Response | Research Read-Through |
|---|---|---|---|
| Andrew Mok / Barclays | Are utilization trends across medical categories within expectations? | Management said overall trends are within expectations. | Confirm that this opportunity converts into profitable recurring demand. |
| Jessica Tassan / Piper Sandler | What explains the revised medical loss ratio and its reconciliation? | Management said a prior-year adjustment explains much of the improvement. | Confirm that this opportunity converts into profitable recurring demand. |
| Parker Snure / Raymond James | How does the tax-credit transition affect 2027 pricing? | Management said the transition has largely been absorbed. | Treat the stated timetable as conditional on demonstrated execution. |
| Stephen Baxter / Wells Fargo | What explains sequential differences in claims? | Management said metal-tier mix affects the comparison. | Confirm that this opportunity converts into profitable recurring demand. |
| Scott Fidel / Goldman Sachs | How do scale and risk-adjustment transfers affect administration and results? | Management described scale benefits and the expected transfer mechanics. | Confirm that this opportunity converts into profitable recurring demand. |
| Raj Kumar / Stephens Inc. | How can the employer marketplace improve affordability? | Management said its tools can improve affordability for employers. | Confirm that this opportunity converts into profitable recurring demand. |
| Jonathan Yong / UBS | How do competition and enrollment-integrity actions affect 2027 and near-term churn? | Management said integrity actions increase near-term churn. | Treat the stated timetable as conditional on demonstrated execution. |
| Michael Ha / Baird | Has the underlying full-year risk-adjustment expectation changed? | Management said the full-year expectation is unchanged. | Confirm that this opportunity converts into profitable recurring demand. |
| Dave Windley / Jefferies | How much further distribution and plan-mix optimization is possible? | Management said further optimization is possible but smaller than the prior transition. | Confirm that this opportunity converts into profitable recurring demand. |
| Kevin Fischbeck / Bank of America | What drives the increase in guidance? | Management said prior-period development accounts for much of the uplift. | Treat the stated timetable as conditional on demonstrated execution. |
| Justin Lake / Wolfe Research | When will enrollment-integrity disenrollments affect membership? | Management said disenrollment timing shifted into the second half. | Confirm that this opportunity converts into profitable recurring demand. |

### Analyst-Q&A Takeaway

Much of the guidance improvement reflects favorable prior-period development. Underlying claims, risk adjustment and integrity-driven disenrollment should determine sustainable earnings rather than the headline profit increase.

## Thesis Monitoring

| Driver | Current State | Positive Trigger / Catalyst | Negative Trigger / Falsifier | What It Changes |
|---|---|---|---|---|
| Ultimate medical costs and pricing adequacy | Better pricing and operating execution can produce attractive profits in a growing individual market. | Revenue trajectory sustains approximately 12% annual growth on a comparable basis | Growth remains below the -2% bear assumption over a full operating cycle | Revenue outlook and scenario probabilities |
| ACA subsidies, regulation and risk adjustment | Medical loss ratio, administrative ratio, risk-adjustment accuracy, member retention and pricing adequacy determine unit economics. | After-cost earnings progress toward the base implied net margin of 3.8% | Competition, credit losses or service costs make that margin trajectory unattainable | Margins, moat score and valuation multiple |
| Full-year profitability and statutory capital | Q2 adjusted EBITDA was about $415 million, but insurer cash inflows include premiums and settlement timing that are not freely distributable. | Financing and compensation remain consistent with 325.3M economic shares in the 2029 base case | Required capital or cumulative dilution materially exceeds the model without matching earnings | Financial score, confidence and downside value |

## Quality & Opportunity Scorecards

### Quality Score

| Component | Score | Weight | Weighted Contribution | Evidence |
|---|---|---|---|---|
| Business durability and economics | 60 | 25% | 15.0 | Medical loss ratio, administrative ratio, risk-adjustment accuracy, member retention and pricing adequacy determine unit economics. |
| Moat and competitive position | 48 | 25% | 12.0 | Technology, service and distribution offer differentiation, but do not create an impregnable underwriting moat. |
| Growth runway and durability | 80 | 20% | 16.0 | The individual market can benefit from labor-market flexibility and employer coverage changes. |
| Financial quality and balance sheet | 62 | 15% | 9.3 | Q2 adjusted EBITDA was about $415 million, but insurer cash inflows include premiums and settlement timing that are not freely distributable. |
| Management, governance and capital allocation | 62 | 15% | 9.3 | Mark Bertolini brings industry experience and has improved operating focus. |
| **Quality Score** | **61.6** | **100%** | **61.6** | Weighted score, independent of ownership and current price |

- **Quality Tier:** C
- **Speculative override:** None

### Opportunity Score

| Component | Raw Input | Normalized Score | Weight | Weighted Contribution |
|---|---|---|---|---|
| Quality | 61.6 | 61.6 | 30% | 18.5 |
| Probability-weighted upside | -24.7% | 0.6 | 35% | 0.2 |
| Bear-case downside | -88.2% | 0.0 | 20% | 0.0 |
| Risk / valuation confidence | 35 | 35.0 | 15% | 5.3 |
| **Opportunity Score** |  | **23.9** | **100%** | **23.9** |

- **Opportunity Rank:** #73 of 76
- **Zone Status:** Avoid

## Portfolio Context

- **Tracking tier:** Primary Watchlist
- **Owned:** No
- **Tracking source of truth:** `my_watchlist.md`
- **Portfolio source of truth:** `portfolio/holdings.md`
- **Scoring independence:** Ownership, account, shares, position size and cost basis do not change research, valuation, Quality, Opportunity, rank or zones.

## Investment Decision History

| Timestamp | Price | Rating | Zone Status | Buy Zone | Strong Buy Zone | Avoid Chasing Above | Base FV | P/W FV | P/W Return | Quality | Opportunity / Rank | Change / Rationale |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026-10-21 (America/New_York) | $33.66 | Avoid | Avoid | >$4.22–$19.53 | ≤ $4.22 | > $27.12 | $25.63 | $24.41 | -27.5% | 61.6 | 23.7 / #67 | Initial missing-file analysis; common-universe ranking; independent scenario assumptions |

---

## Material Sources

| Source | Type | Date / Period | What It Supports |
|---|---|---|---|
| [Oscar Health Announces Record Financial Results for First Half 2026 and Raises Full Year 2026 Outlook :: Oscar Health, Inc. (OSCR)](https://ir.oscarhealth.com/news-events/press-releases/detail/224/oscar-health-announces-record-financial-results-for-first-half-2026-and-raises-full-year-2026-outlook) | Company IR / earnings filing | Q2 2026 | Latest operating results, guidance, products and financial supplement |
| [OSCR complete earnings-call transcript](https://stockanalysis.com/stocks/oscr/transcripts/661338-q2-2026/) | Transcript | Q2 2026 | Prepared remarks and all material Q&A exchanges |
| [OSCR regular-session historical price](https://stockanalysis.com/stocks/oscr/history/) | Market data | 2026-10-20 close | Common price used in returns, scores and zones |
| [OSCR valuation statistics](https://stockanalysis.com/stocks/oscr/statistics/) | Market data | 2026-10-20 close; ratios retrieved 2026-10-21 | Market capitalization, shares, quoted multiples and current ratios |
| [OSCR historical income statement](https://stockanalysis.com/stocks/oscr/financials/income-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical income statement; source-native currency and definitions |
| [OSCR historical balance sheet](https://stockanalysis.com/stocks/oscr/financials/balance-sheet/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical balance sheet; source-native currency and definitions |
| [OSCR historical cash flows](https://stockanalysis.com/stocks/oscr/financials/cash-flow-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical cash flows; source-native currency and definitions |
| [Centene statistics](https://stockanalysis.com/stocks/cnc/statistics/) | Comparable-company market data | 2026-10-20 regular close | Peer multiples and financial context; public quote basis |
| [Molina statistics](https://stockanalysis.com/stocks/moh/statistics/) | Comparable-company market data | 2026-10-20 regular close | Peer multiples and financial context; public quote basis |
| [2025 10-K — plan markets and competition](https://www.sec.gov/Archives/edgar/data/1568651/000156865126000011/oscr-20251231.htm) | Regulatory filing / primary product evidence | FY2025; checked 2026-10-28 | Individual-market competition and network/geographic differences |
| [SEC XBRL company facts — OSCR](https://data.sec.gov/api/xbrl/companyfacts/CIK0001568651.json) | Regulatory filing (as tagged) | FY2026, through 2026-09-30 | Current-year standalone-quarter and year-to-date source facts for FCF, SBC, revenue and other reported metrics |