To The Moon

$Oscar Health, Inc.(OSCR)$

Most investors wouldn’t think of a health insurance company as an exciting growth story. But Oscar Health (NYSE: OSCR) is no ordinary insurance business — it’s a tech-first disruptor that’s quietly building one of the most agile and efficient health insurance platforms in the U.S. market today.

While the broader market has been obsessing over rate cuts, inflation data, and big-cap AI trades, Oscar has been executing quietly in the background, delivering explosive revenue growth, expanding its membership base by 5x in just a few years, and now — for the first time — turning a profit. Yet, the stock still trades like a distressed company. For long-term investors with a high-risk tolerance and a venture capital mindset, Oscar Health may be one of the most undervalued asymmetric bets in the public markets today.

Oscar Health has caught my attention in a major way. I’ve taken a position — and it’s not because of recent price action or momentum. It’s because Oscar represents a rare intersection of misunderstood fundamentals, mispriced risk, and underappreciated optionality. Despite a 16.5% jump in a single day, I still believe there is significant long-term upside ahead. Let’s break it down.

Earnings Overview

Oscar Health delivered strong financial results in the first quarter of 2025, showing rapid membership growth, improving profitability, and ongoing operating leverage as it scales its modern insurance platform.

• Revenue: Total revenue reached $3.05 billion, representing 42% year-over-year growth.

• Membership: Total enrolled members surpassed 2.04 million, up roughly 41–42% from the prior year.

• Operating Income: Earnings from operations rose to $297 million, compared to $185 million in Q1 of the previous year.

• Net Income: Net income came in at $275 million, or $0.92 per diluted share, up from $177 million ($0.62 EPS) in the same period last year.

• Adjusted EBITDA: Adjusted EBITDA improved significantly to $328 million, reflecting scalable infrastructure and improving operating efficiency.

Fundamental Analysis: The Business Model That’s Redefining Group Insurance

Oscar Health is best described as a tech-driven health insurance platform that’s focused primarily on individual and small-group plans in the U.S. healthcare market. The company was founded with a mission to create a more transparent, consumer-friendly insurance experience, combining digital interfaces, personalized care, and modern administrative systems.

But the real game-changer is Oscar’s aggressive push into ICHRA — the Individual Coverage Health Reimbursement Arrangement.

What is ICHRA?

ICHRA is a relatively new framework (legalized in 2020) that allows employers to reimburse employees tax-free for the cost of individual health insurance policies. In traditional group plans, employers manage the plan, select a one-size-fits-all policy, and shoulder the risk of rising premiums based on group claims.

With ICHRA:

• Employers set a fixed, predictable monthly budget.

• Employees use that budget to select individual plans that match their needs.

• No need for group underwriting, and no more managing insurance logistics in-house.

Oscar is one of the first movers building a tech-first platform around this model. That matters — because small businesses, which employ roughly 47% of the private workforce in the U.S., are grossly underserved by traditional insurers due to high costs, complexity, and administrative burden.

Guidance & Forward Outlook

• Full-Year 2025 Revenue Guidance: Management reaffirmed expectations for total revenue in the range of $11.2–11.3 billion, consistent with Oscar's long-term goal of 20% compound annual growth.

• Profitability Trajectory: The company remains focused on sustaining profitability through margin discipline while continuing to expand market share across both new and existing geographies.

• Next Earnings Report: Scheduled for early August 2025, likely around August 6–7.

Business Momentum

• Oscar’s membership and revenue are growing rapidly due to its innovative approach to employer-sponsored insurance, where employees can choose personalized individual plans while employers set a fixed budget.

• Strong earnings performance drove recent bullish sentiment, and the company has gained attention from institutional investors and analysts for both its growth trajectory and its newly achieved profitability.

Oscar's Advantage

Oscar’s platform streamlines the entire process:

• Setup in under 10 minutes (vs. 30+ hours for legacy plans).

• No participation minimums.

• Available even to solo entrepreneurs or micro-businesses.

• Employees can customize their plans, unlike in traditional models.

This structure creates a triple win:

1. Employers get cost certainty and compliance simplicity.

2. Employees get plan choice, transparency, and affordability.

3. Oscar gets scalable, low-risk recurring revenue with a low cost of customer acquisition.

Undeniable Cost and Satisfaction Edge

In a commoditized industry like health insurance, two metrics matter most: price and consumer sentiment. Oscar outperforms on both fronts.

1. Oscar is Significantly Cheaper

Across every major age group, Oscar’s plans are 10–20% less expensive than legacy insurers:

2. Higher Customer Satisfaction

According to a Forbes survey, Oscar scored 0.51 in negative sentiment — far better than UnitedHealth’s 2.67, and better than most major insurers. In a sector where most providers are loathed, Oscar being “less hated” is a serious competitive advantage.

Hypergrowth Hidden in Plain Sight

The most striking part of Oscar’s story is its growth trajectory, which the market has failed to fully appreciate:

• Membership base: From 400,000 to over 2 million in just a few years.

• Revenue: From $400 million to $11.2 billion — a 69% CAGR.

• Enterprise value-to-sales: Just 0.2x — despite this hypergrowth and a positive cash position.

For context, most high-growth tech companies trading at this scale would be priced at 5x to 10x sales — yet Oscar trades well below 1x.

Profitability Turning Point

After years of burning cash, Oscar just turned profitable, with net margins swinging from -20% to +1.2%. That’s a massive milestone, especially in insurance — where companies with just 10–15% margins trade at high valuations.

Here’s what the earnings trajectory looks like:

Oscar’s own guidance is even more optimistic: they expect $2.25 EPS by 2027, assuming only modest margin expansion and a continued 20% CAGR in revenue.

Valuation Math: Is Oscar a 3-Bagger?

Let’s run some quick numbers.

• 2027 EPS = $2.25

• Target P/E = 25x (fair for 20%+ growth)

• Target Price = $56.25/share

• Current Price = $18/share

That’s +212% upside in ~2.5 years — a 3-bagger if it plays out.

Even a conservative 20x multiple puts it at $45/share — still over 150% upside.

This is without any speculative AI tailwinds, meme stock hype, or rate cut assumptions — just core business execution.

The Elephant in the Room: Subsidies

Now to the risk section. One of Oscar’s biggest accelerants — but also its biggest overhang — is the reliance on health insurance subsidies.

• Employees making <$23,000/year pay $0 in premiums (fully subsidized).

• Without subsidies, they pay $75 — still affordable, but less competitive.

These subsidies are set to expire at the end of 2025, unless Congress renews them.

Here’s the nuance:

• Oscar’s internal forecast for $2.25 EPS assumes subsidies do not renew.

• If they are renewed, Oscar’s total addressable market jumps from 24 million to 31 million.

• That creates free upside — a “call option” the market isn’t pricing in.

Given that 2026 is an election year, it’s very possible subsidies will be extended again — both Democrats and Republicans have political incentives to do so.

Asymmetry: Limiting Risk, Maximizing Upside

I personally view Oscar as a high-risk, high-reward trade with asymmetric payoff. That means:

• Limited capital allocated — just 1–2% of a diversified portfolio.

• Defined downside — max -50% if thesis breaks.

• Unlimited upside — 3x to 5x potential over a 2–3 year horizon.

That’s why I’ve entered via June 2026 $25 call options, which are already up 65% in two days. I may layer in common shares as the story develops further.

This is the same playbook I used with Hims & Hers (HIMS) when it was unprofitable and unloved in 2023. The key is to get in when the narrative is just beginning to change — not after the crowd piles in.

Conclusion: A Rare Opportunity in Insurance

Oscar Health is one of the most compelling early-stage compounders I’ve seen recently. It checks all the boxes:

• Disruptive model with real-world use cases.

• Clear product-market fit.

• Explosive growth in revenue and members.

• Strong unit economics.

• Turning profitable ahead of schedule.

• Valuation still in deep value territory.

Of course, there are risks. Profitability needs to hold. The subsidy renewal is a wild card. Execution needs to be flawless. But the market is already pricing Oscar as if it’s doomed — and that disconnect creates the opportunity.

If Oscar continues to execute, this stock could go from being a forgotten $4 billion company to a $15–20 billion powerhouse by the end of the decade.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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