Oscar Health (OSCR) Is Just Starting To Explode — Here’s Why I’m Buying

Healthcare stocks don’t usually top my watchlist, but lately I’ve been spending time looking into Oscar Health (ticker: OSCR), and something about it just makes sense. After running through the numbers, the growth trajectory, and how the market is reacting, I’ve decided to open a position. It’s not a perfect company—far from it—but I think it’s worth the shot.

Is Oscar Health a growth stock worth watching in 2025?

From what I’ve seen, yeah, it definitely is. Their revenue jumped 42% year-over-year in Q1 2025, hitting a little over $3 billion. Earnings per share came in at $0.92, which beat expectations by a solid margin. They’re still sticking to their guidance for the year too, which includes growing their member base to over 2 million. That’s a 41% increase from last year, which is not small.

They’re not just growing the top line either. Free cash flow is up big—like, over 200% CAGR over the last few years. I’ve written about why free cash flow matters more than revenue here, and Oscar’s numbers are really starting to shine in that regard.

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Is OSCR stock undervalued or overpriced?

This part took a little digging. The forward P/E ratio floats somewhere between 32x and 50x depending on where you check. Yeah, that’s on the high side compared to legacy insurers that sit closer to 14–18x. But the PEG ratio is what really changed the story for me—it's around 0.6, which usually signals undervaluation when adjusted for growth. That gave me a little more comfort.

Same goes for the price-to-sales ratio, which is sitting under 0.4. That’s actually pretty attractive, especially for a company with this much revenue. The price-to-book is a bit higher—somewhere between 2.8 and 4x—but honestly, I think the premium is fair considering their digital-first approach and long-term strategy.

I touched on why P/S ratios can be misleading if growth is accelerating in my recent take on Nvidia's valuation story.

How does Oscar Health make money—and can it scale?

Oscar’s niche is clear. They’re a tech-driven health insurer focused on individual markets, ACA exchanges, and underserved populations. They’ve now got a presence in 18 states and over 500 counties. Some of their recent rollouts, like their Spanish-first “Buena Salud” plans, seem like smart plays for targeting specific communities.

They’ve also partnered with platforms like StretchDollar and expanded virtual care options, which feels in line with where healthcare is headed. They’re not a big dog yet, but they’re growing. Right now they’ve got about 13% market share in the ACA exchange areas where they operate, and they’re aiming for 18% by 2027. Ambitious, but not unrealistic.

The setup reminds me of how Royalty Pharma (RPRX) was positioning itself in a niche but doing it with precision.

What are the risks with OSCR stock?

No sugarcoating it—there are definitely risks here.

For starters, short interest has been creeping up. Last I checked, it was sitting around 10–12%, which is definitely higher than the average. Also saw that a director sold about $400K worth of shares. That’s not nothing.

The bigger thing though is the regulatory exposure. Since Oscar relies heavily on ACA exchange participation, any major legislative changes could throw a wrench into the whole model. And even though they’ve built some differentiation, I wouldn’t say they have a deep moat just yet. Larger players with more resources could eventually replicate what they’re doing.

Still, their operating leverage is starting to show, which made me think back to how I break down gross margin signals in growth stocks.

But for me, I’m comfortable with those risks. I’m not betting the farm here. It’s a calculated move with a position size that fits the risk level.

What are analysts saying about Oscar Health stock?

Analyst opinions are kind of mixed right now. Only about 20% have a Buy rating on the stock, while the rest are split between Hold and Sell. The average price target is around $18.36, which gives about 14% upside from where it was trading recently (around $16.11).

Price targets are all over the place—some as low as $12, others as high as $28. Piper Sandler recently trimmed their target from $25 to $18, mostly due to concerns over healthcare policy shifts. It’s not exactly a glowing endorsement, but it’s not a red flag either.

If you’ve read my take on UnitedHealth (UNH), you’ll know how I feel about analyst targets—they’re useful, but not gospel.

Why I’m buying OSCR now (and what I’ll be watching)

After all this, I’ve decided to start a position. Not going all in—just dipping in with enough to feel the upside if it plays out, but not enough to keep me up at night if it doesn’t.

What I’m watching next:

• Earnings for Q2 (expected August 6) to see if they can keep this momentum
• Any updates on ACA-related legislation that could shift the landscape
• Institutional buying or insider activity that might signal more confidence

Also keeping an eye on ROE and operating returns—I wrote about common ROIC traps recently, and Oscar doesn’t fall into those... at least not yet.

Final Thoughts

Oscar isn’t a household name, and it’s definitely not a “safe” pick. But it’s doing a lot of things right. The growth is there. The valuation makes sense once you factor in that growth. And the strategy feels targeted and intentional.

It’s not about chasing hype here. I like what I see in the fundamentals, I like the risk-reward profile, and I like where the company’s headed. So yeah—I’m in.

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