Last Update 19 Dec 25

Fair value Increased 2.03%

OSCR: Premium Hikes And AI Product Expansion Will Shape Future Margin Outcomes

Oscar Health's fair value estimate has inched up to approximately $14.67 per share from about $14.38 as analysts factor in higher long term earnings power, supported by recent price target upgrades into the mid teens and low $20s that cite improved benefit design, pricing strategy, and the potential for sustained profitability even under conservative policy assumptions.

Analyst Commentary

Recent Street research presents a mixed but generally improving picture for Oscar Health, with multiple firms revising price targets upward while maintaining differing views on risk, execution, and the durability of growth. The dispersion between targets in the low teens and the mid 20s highlights both upside optionality and ongoing uncertainty around policy and margin normalization.

Bullish Takeaways

Bullish analysts see the move to a $25 price target as evidence that enhanced benefit design, more disciplined pricing, and a refined broker strategy can support both share gains and margin expansion, which would justify a premium multiple to current trading levels.
Deep dive work in key markets, such as Miami Dade, underpins the view that Oscar can grow profitably even if enhanced subsidies expire after 2025, suggesting that current valuation does not fully reflect its earnings power under more conservative policy scenarios.
The assertion that 2027 adjusted EBITDA of roughly $400M is a downside case, rather than a base or bull case, supports higher long term fair value estimates as investors gain confidence in the company’s ability to scale profitably.
Rate increases approaching 30 percent, combined with more competitive bronze and gold tier products, are seen as evidence that management can reprice appropriately for medical cost trends while still driving membership growth. This is viewed as critical to deleveraging fixed costs.

Bearish Takeaways

Bearish analysts retain Underweight stances despite raising targets into the low to mid teens, signaling that, in their view, much of the near term improvement is already reflected in the share price relative to execution and policy risk.
Some expect a longer path to cyclical recovery in the healthcare exchange channel, which could constrain revenue growth and delay full margin normalization, limiting upside to valuation multiples in the medium term.
Goldman Sachs, while initiating above the current fair value estimate, maintains a Neutral view. The firm cites a broader managed care underwriting downturn and uneven recovery across products, which could pressure Oscar’s ability to consistently hit earnings targets.
Even with improved pricing assumptions, concerns remain that a less favorable subsidy regime or adverse policy shifts after 2025 could compress enrollment and EBITDA, implying downside risk if execution falters or macro conditions deteriorate.

What's in the News

Oscar Health reaffirmed its 2025 outlook, guiding to $12.0 billion to $12.2 billion in revenue and a loss from operations of $300 million to $200 million. This underscores confidence in its near-term growth and profitability trajectory (Corporate Guidance).
The company announced a broad 2026 product expansion, rolling out affordable, tech powered individual and family plans, chronic condition focused offerings, and employer linked coverage across multiple new and existing markets, including Alabama, Mississippi, New Jersey, Arizona, Ohio, Texas, Florida, and others (Product Related Announcements).
Oscar is commercializing Oswell, a personal health AI agent that integrates medical records and plan data to provide on demand support, triage, and navigation for members. This positions AI as a core differentiator in its member experience (Product Related Announcements).
HelloMeno, described as the first menopause focused plan in the ACA individual market, will launch across a wide multistate footprint in 2026. It will offer $0 visits and no cost labs and therapies that could deepen engagement among midlife women and their families (Product Related Announcements).
Condition focused and Spanish first plans, including chronic care and diabetes specific designs, are being introduced or expanded to help members with diabetes, COPD, asthma, and cardiovascular kidney metabolic conditions access $0 primary and specialist care and lower cost medications. This reinforces Oscar's strategy of differentiated benefit design for high need populations (Product Related Announcements).

Valuation Changes

Fair Value Estimate has risen slightly from $14.38 to about $14.67 per share, reflecting modestly higher long term earnings assumptions.
The Discount Rate is effectively unchanged at approximately 6.96 percent, indicating no material shift in the perceived risk profile.
Revenue Growth has edged down slightly from about 9.92 percent to roughly 9.85 percent, signaling a marginally more conservative top line outlook.
The Net Profit Margin has eased modestly from around 2.32 percent to about 2.28 percent, implying slightly lower long term profitability assumptions.
The Future P/E has increased from roughly 15.7x to about 16.4x, suggesting a somewhat higher valuation multiple applied to forward earnings.

Higher claims costs and evolving policy risks threaten profitability and future membership growth, despite efforts to reprice plans and leverage digital adoption trends.
Regulatory shifts and industry consolidation could inflate expenses and hinder Oscar's ability to realize anticipated technology-driven cost advantages and margin improvements.
Digital innovation, strong revenue growth, risk-adjusted pricing, strategic expansion, and financial resilience position Oscar Health for sustained profitability and market leadership.

Catalysts

About Oscar Health

Operates as a healthcare technology company in the United States.What are the underlying business or industry changes driving this perspective?

Recent market-wide increases in morbidity within the individual ACA market highlight Oscar Health's vulnerability to dynamic risk pools-heightening uncertainty in claims costs and putting pressure on the company's ability to maintain or grow net margins and future earnings, even with planned repricing actions.
Concerns over potential policy shifts-such as the expiration or non-renewal of enhanced premium tax credits-pose a risk to future membership growth and revenue, as lower subsidies could shrink Oscar's addressable market despite positive digital adoption trends.
Increasing regulatory scrutiny and program integrity efforts (e.g., Medicaid redetermination, stricter eligibility enforcement) are driving out low-utilizing members and reshaping Oscar's customer mix toward higher-cost segments, which may elevate the company's medical loss ratio and reduce profitability in the longer term.
Industry-wide acceleration toward value-based care and consolidation between payers, providers, and PBMs could exclude Oscar from favorable cost structures and preferred provider rates, limiting Oscar Health's ability to control costs and compressing operating margins.
Heightened consumer privacy concerns and the tightening of data regulation threaten Oscar's ability to fully leverage its proprietary technology and data analytics platform for differentiated underwriting and medical management, potentially slowing cost-efficiency gains and dampening margin expansion expectations.

Oscar Health Earnings and Revenue Growth

Oscar Health Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Oscar Health's revenue will grow by 4.9% annually over the next 3 years.
Analysts assume that profit margins will increase from -1.5% today to 2.0% in 3 years time.
Analysts expect earnings to reach $245.4 million (and earnings per share of $1.12) by about September 2028, up from $-161.2 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.3x on those 2028 earnings, up from -32.1x today. This future PE is greater than the current PE for the US Insurance industry at 14.3x.
Analysts expect the number of shares outstanding to grow by 4.57% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Oscar Health Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Robust digital adoption and AI-driven efficiencies in healthcare are driving Oscar Health's operating cost reductions-such as a $60 million planned administrative cost cut in 2026-which can lead to improved net margins and set the stage for operating profitability.
Oscar Health's strong year-over-year revenue growth (29% in Q2) and consistently rising membership (28% growth, topping 2 million members) demonstrate competitive strength and sustained market demand, supporting top-line revenue expansion.
The normalization of higher market morbidity through aggressive repricing (double-digit rate increases for 2026 already refiled in nearly all markets) and productive regulator engagement increase confidence in future margin recovery and a return to positive earnings.
Strategic expansion into ICHRA and acquisitions of digital enrollment/broker platforms position Oscar to diversify revenue streams, access broader customer segments (employers as well as individuals), and gain long-term share, supporting both revenue stability and growth.
The company's substantial capital reserves ($5.4 billion in cash/investments, $579 million in excess capital at insurance subsidiaries), low leverage, and disciplined SG&A management provide ample liquidity and financial resilience, enhancing long-term earnings power and reducing solvency risk.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $11.143 for Oscar Health based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $14.0, and the most bearish reporting a price target of just $8.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $12.4 billion, earnings will come to $245.4 million, and it would be trading on a PE ratio of 16.3x, assuming you use a discount rate of 6.8%.
Given the current share price of $20.05, the analyst price target of $11.14 is 79.9% lower. Despite analysts expecting the underlying buisness to improve, they seem to believe the market's expectations are too high.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Raise Oscar Health Price Target amid Profitability Hopes and New Healthcare Initiatives