Results: Oscar Health, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Oscar Health, Inc. (NYSE:OSCR) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 7.5% to hit US$2.1b. Oscar Health also reported a statutory profit of US$0.62, which was an impressive 142% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Oscar Health after the latest results.

View our latest analysis for Oscar Health

Following the latest results, Oscar Health's three analysts are now forecasting revenues of US$8.68b in 2024. This would be a substantial 33% improvement in revenue compared to the last 12 months. Statutory losses are forecast to narrow 5.2% to US$0.24 per share. In the lead-up to this report, the analysts had been modelling revenues of US$8.38b and earnings per share (EPS) of US$0.42 in 2024. While they've upgraded their revenue numbers for next year, the consensus also expects losses to increase, perhaps due to the investments required to fund that growth In any event, it's not clear that these new estimates are particularly bullish.

The average price target rose 21% to US$23.00, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Oscar Health analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$21.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Oscar Health'shistorical trends, as the 46% annualised revenue growth to the end of 2024 is roughly in line with the 56% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.8% annually. So although Oscar Health is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Oscar Health to become unprofitable next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Oscar Health. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Oscar Health analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Oscar Health that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.