Key Takeaways:
- Oscar Health delivered record Q1 results with $3 billion in revenue, up 42% year-over-year.
- It achieved its lowest SG&A ratio in history at 15.8%, demonstrating operational efficiency gains.
- Membership grew 41% to approximately 2 million effectuated members, driven by strong retention and new enrollment.
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Valued at a market capitalization of $3.7 billion, Oscar Health (OSCR) operates as a technology-focused health insurance company serving individual and small group markets through the Affordable Care Act exchanges and Individual Coverage Health Reimbursement Arrangements.
The company has established itself as a leading disruptor in the health insurance industry by leveraging technology and data analytics to improve member experience while maintaining disciplined medical cost management and operational efficiency.
The healthcare stock has outpaced the broader markets in the last three years. However, given its growth estimates, it continues to trade at an enticing valuation in June 2025.
Let’s explore why you might consider adding this mid-cap health tech stock to your equity portfolio today.
1. Oscar Health Posts Strong Q1 Results
Oscar Health delivered exceptional first-quarter results that exceeded expectations across key financial metrics. Total revenue reached $3 billion, representing 42% year-over-year growth, while net income surged to approximately $275 million, a $98 million improvement over the prior year period.
The company’s membership base expanded significantly to approximately 2 million effectuated members, reflecting 41% year-over-year growth and 22% sequential increase.
This growth was driven by strong member retention rates, above-market performance during open enrollment, and continued additions through special enrollment periods.
Operating performance demonstrated substantial improvement, with earnings from operations growing from $112 million to $297 million and the operating margin expanding by 110 basis points to 9.8%.
The medical loss ratio increased 120 basis points to 75.4%, primarily due to a risk adjustment true-up for 2024, while still maintaining strong profitability levels.
Oscar’s technology investments continued to drive member engagement and operational efficiency. Its digital platforms showed high utilization rates across both Individual Family Plans and Individual Coverage Health Reimbursement Arrangement membership, enabling more effective care management and cost control.
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2. Oscar Health Operates a Technology-Driven Insurance Platform
Oscar Health has differentiated itself through innovative technology solutions that enhance both member experience and operational efficiency. Its platform integrates care delivery, member engagement, and administrative functions to create a seamless healthcare experience.
Recent technology launches demonstrate Oscar’s commitment to innovation. It introduced a free live chat feature for Oscar Virtual Urgent Care that reduced member response times by 90% and improved provider efficiency by 28%.
Additionally, new AI tools for Care Guides are accelerating the delivery of member services and problem resolution.
Oscar’s condition-focused plan designs have proven to be strong performers within the membership portfolio, allowing for targeted care management and improved health outcomes.
Its technology platform enables personalized interventions and proactive member outreach, driving better clinical results while controlling costs.
Strategic partnerships are expanding Oscar’s value proposition beyond traditional insurance coverage.
The launch of Oscar Community Resources, in partnership with Find Health, connects members to local food, housing, transportation, and other social services that impact health outcomes, supporting clinical intervention programs while reducing overall healthcare costs.
3. OSCR Stock Should Benefit From a Competitive Advantage
Oscar Health has achieved industry-leading operational efficiency metrics, which provide a sustainable competitive advantage.
The company reported its lowest SG&A expense ratio in history, at 15.8%, representing a 260-basis-point improvement year-over-year through fixed cost leverage, lower exchange fee rates, and variable cost efficiencies.
This operational excellence stems from Oscar’s disciplined approach to expense management combined with technology-driven automation and process improvements.
An ability to scale operations efficiently while maintaining service quality positions it to capture market share growth profitably.
The regulatory environment presents both challenges and opportunities for Oscar Health. While proposed program integrity initiatives from CMS may constrain enrollment growth through shortened enrollment windows, these measures support long-term market stability by reducing fraud and abuse.
Oscar’s established compliance infrastructure and legitimate member base position the company to benefit from a cleaner marketplace.
Oscar Health maintains strong guidance for 2025, with total revenue expected to be in the range of $11.2 billion to $11.3 billion, a medical loss ratio projected between 80.7% and 81.7%, and an SG&A expense ratio anticipated at 17.6% to 18.1%. It expects earnings from operations between $225 million and $275 million.
The balance sheet remains robust with approximately $4.9 billion in cash and investments, including $1.5 billion in insurance subsidiary capital and surplus. Its excess capital position of $907 million provides flexibility for growth investments and strategic initiatives.
Valuation Setup for OSCR Stock
Analysts tracking Oscar stock expect its sales to rise from $9.17 billion in 2024 to $13 billion in 2027, an annual increase of 12.5%. Comparatively, adjusted earnings are forecast to expand from $0.10 per share to $1.96 per share in this period.
OSCR stock currently trades at a forward price-to-earnings multiple of 32x, which is below its 12-month average multiple of 66x.
If Oscar Health stock is priced at a multiple of 14x and reaches its projected $1.96 in normalized EPS, it will trade around $28/share in early 2027, indicating an upside potential of almost 100% from current levels.
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Average Analyst Price Target for OSCR Stock
Wall Street remains bullish on OSCR stock, with a consensus price target of $18.56/share. Analysts expect the stock to rise around 26% from current levels over the next 18 months.
Notably, OSCR stock currently has a high target price of $28 and a low target price of $12.
Of the seven analysts tracking Oscar Health stock, three recommend “Buys”, two recommend “Hold”, and two recommend “Sell.”
TIKR Takeaway for Oscar Health Stock
Oscar Health represents a compelling investment opportunity in the evolving health insurance sector, combining technology innovation with disciplined operational execution.
Its record financial performance demonstrates the effectiveness of its member-centric approach and efficient cost structure.
Oscar’s proven ability to drive membership growth while maintaining profitability, combined with its technology advantages and strong balance sheet, positions the company for continued outperformance in the health insurance sector.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
