Oscar Health (OSCR)

Health insurance company Oscar Health (NYSE:OSCR) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 17.3% year on year to $2.81 billion. On the other hand, the company’s full-year revenue guidance of $18.85 billion at the midpoint came in 47.8% above analysts’ estimates. Its GAAP loss of $1.24 per share was 43.7% below analysts’ consensus estimates.

Company Overview

Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE:OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.

Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.

Oscar Health competes with major health insurance providers like UnitedHealth Group (NYSE:UNH), Cigna (NYSE:CI), Anthem/Elevance Health (NYSE:ELV), and Centene (NYSE:CNC), as well as other tech-focused insurance companies like Bright Health Group (NYSE:BHG) and Clover Health (NASDAQ:CLOV).

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With $11.7 billion in revenue over the past 12 months, Oscar Health has decent scale. This is important as it gives the company more leverage in a heavily regulated, competitive environment that is complex and resource-intensive.

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Oscar Health’s sales grew at an incredible 49% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Oscar Health’s annualized revenue growth of 41.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Oscar Health’s revenue grew by 17.3% year on year to $2.81 billion but fell short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 9.9% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and indicates the market is forecasting success for its products and services.

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Oscar Health’s high expenses have contributed to an average operating margin of negative 4.9% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out.

On the plus side, Oscar Health’s operating margin rose by 16.7 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

In Q4, Oscar Health generated a negative 11.9% operating margin.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Although Oscar Health’s full-year earnings are still negative, it reduced its losses and improved its EPS by 33.7% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.

In Q4, Oscar Health reported EPS of negative $1.24, down from negative $0.62 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Oscar Health to improve its earnings losses. Analysts forecast its full-year EPS of negative $1.76 will advance to negative $0.07.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Oscar Health has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 5.3% over the last five years, slightly better than the broader healthcare sector.

Taking a step back, we can see that Oscar Health’s margin expanded by 16.7 percentage points during that time. This is encouraging because it gives the company more optionality.

Oscar Health’s free cash flow clocked in at $662.8 million in Q4, equivalent to a 23.6% margin. This result was good as its margin was 9.4 percentage points higher than in the same quarter last year, building on its favorable historical trend.

Businesses that maintain a cash surplus face reduced bankruptcy risk.

Oscar Health is a well-capitalized company with $4.02 billion of cash and $430.1 million of debt on its balance sheet. This $3.59 billion net cash position is 107% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

We were impressed by Oscar Health’s optimistic full-year revenue guidance, which blew past analysts’ expectations. On the other hand, its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 1.4% to $12.49 immediately after reporting.

Updated: February 10, 2026 at 11:37 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

Oscar Health is truly a cream-of-the-crop healthcare company. To begin with, its revenue growth was exceptional over the last five years, and its growth over the next 12 months is expected to accelerate. And while its operating margins reveal poor profitability compared to other healthcare companies, its rising cash profitability gives it more optionality. Additionally, Oscar Health’s expanding adjusted operating margin shows the business has become more efficient.

Oscar Health’s forward price-to-sales ratio is 0.2x. Looking at the healthcare landscape today, Oscar Health’s qualities really stand out, and we like it at this price.

Wall Street analysts have a consensus one-year price target of $15.78 on the company (compared to the current share price of $13.05), implying they see 20.9% upside in buying Oscar Health in the short term.