Key Takeaways
- Oscar Health has revised its 2025 revenue guidance upwards to between $12.0 billion and $12.2 billion, but also increased its projected medical loss ratio, signalling higher than expected medical costs.
- The company’s leadership has projected a potential share price of $45 to $55 by 2027, a significant increase that hinges on achieving sustained high growth and consistent profitability.
- Growth is primarily driven by a technology-led insurance model that has attracted a rapidly expanding member base, particularly in the individual and small employer markets.
- Significant risks remain, including the challenge of managing rising medical costs, navigating regulatory complexities, and competing with established industry giants.
The trajectory of Oscar Health, Inc. ($OSCR) has caught the attention of investors seeking exposure to innovative healthcare models, particularly as the company navigates a challenging yet potentially rewarding path towards profitability and market expansion. A key point of interest lies in the ambitious long-term guidance provided by CEO Mark Bertolini, which suggests significant upside in the company’s valuation by 2027. This analysis delves into the feasibility of these projections, evaluates recent financial performance, and considers the broader market dynamics influencing Oscar Health’s outlook.
Recent Financial Performance and Revised 2025 Guidance
Oscar Health’s latest preliminary financial results for Q2 2025 (April–June) reveal a mixed picture. The company has revised its full-year 2025 revenue guidance upwards to a range of $12.0 billion to $12.2 billion, compared to the previous estimate of $11.2 billion to $11.3 billion. This signals robust top-line growth, driven by strong member acquisition and expansion in key markets. However, profitability remains elusive, with the medical loss ratio (MLR) climbing to an estimated 86.0% to 87.0% for 2025, up from the earlier forecast of 80.7% to 81.7%. This rise reflects higher-than-expected medical costs and market risk scores, which have also contributed to a projected operational loss for the year. Additionally, the SG&A expense ratio has been slightly tightened to 17.1% to 17.6%, down from 17.6% to 18.1%, indicating some cost discipline amidst rising claims expenses.
These figures, drawn from the company’s most recent announcements, underscore a critical tension: while Oscar Health demonstrates impressive revenue momentum, the path to consistent profitability is fraught with challenges. The elevated MLR, in particular, suggests that pricing strategies and risk management will need recalibration, a point the company has acknowledged with plans for adjustments in 2026.
Long-Term Projections to 2027: A $45 to $55 Share Price?
Looking further ahead, the company’s leadership has outlined a vision for substantial growth by 2027, with some market observers noting optimism around a potential share price range significantly above current levels. This projection hinges on two primary factors: sustained revenue growth and an expansion in price-to-earnings (P/E) multiples as the company achieves profitability. At present, Oscar Health trades at approximately $15 per share (as of mid-July 2025), reflecting a market capitalisation of around $3.6 billion. Achieving a share price in the higher range by 2027 would imply a market capitalisation of roughly $10 billion to $13 billion, based on the current share count of approximately 240 million.
For context, achieving such a valuation would require annual revenue growth to continue at a compound rate of around 40% to 50% from the 2025 base, alongside a meaningful improvement in margins. Historical data provides some grounding for this optimism—revenue growth over the past five years has averaged approximately 80% annually, with member growth at 51% over the same period. However, sustaining such rates as the company scales becomes increasingly difficult, particularly in a competitive health insurance market dominated by entrenched players like UnitedHealth Group and CVS Health.
Key Growth Drivers and Risks
Oscar Health’s strategy under Bertolini focuses on leveraging technology to disrupt traditional health insurance models, targeting small and mid-sized employers alongside individual marketplaces. The company’s emphasis on digital-first engagement and personalised care has resonated with a growing membership base, as evidenced by a 45% year-on-year revenue increase in Q1 2025 (January–March). Additionally, recent entry into the Fortune 500 highlights its rising profile within the industry.
Nevertheless, risks loom large. The revised 2025 guidance reflects pressures from rising medical costs, which could persist if not addressed through pricing or network optimisation. Moreover, regulatory changes and competitive dynamics in the healthcare sector could dampen growth. The company’s relatively high institutional ownership provides some stability, but short-term volatility remains a concern for investors, as noted in broader market commentary, including passing mentions on platforms like X by accounts such as TacticzHazel.
Valuation Scenarios: A Quantitative Perspective
To assess the plausibility of the long-term valuation target, consider the following scenarios for 2027, assuming revenue and profitability milestones are met:
| Scenario | 2027 Revenue ($B) | Net Margin (%) | Net Income ($M) | P/E Multiple | Market Cap ($B) | Share Price ($) |
|---|---|---|---|---|---|---|
| Base Case | 20.0 | 2.0 | 400 | 25 | 10.0 | 41.67 |
| Optimistic | 22.0 | 3.0 | 660 | 30 | 19.8 | 82.50 |
| Conservative | 18.0 | 1.0 | 180 | 20 | 3.6 | 15.00 |
Conclusion: Balancing Optimism with Pragmatism
Oscar Health’s long-term outlook offers a compelling narrative for growth-oriented investors, underpinned by strong historical revenue trends and a clear strategic focus on market disruption. However, the road to 2027 will require disciplined execution, particularly in managing medical loss ratios and scaling operations without sacrificing margins. While the upper end of the projected valuation range may be achievable under ideal conditions, a more tempered expectation seems prudent given current headwinds. Investors would do well to monitor upcoming quarterly results for signs of improved cost control and sustained member growth, as these will be critical indicators of whether Oscar Health can indeed deliver on its ambitious vision.
References
- Business Insider. (2024, January 29). *Oscar Health’s new CEO has a plan to grow the buzzy health insurer that’s never been profitable*. Retrieved from https://www.businessinsider.com/oscar-health-ceo-mark-bertolini-plans-to-grow-insurer-2024-1
- CNBC. (2024, June 7). *Oscar Health’s CEO says there’s big opportunity in the small employer market*. Retrieved from https://www.cnbc.com/2024/06/07/oscar-health-ceo-mark-bertolini-employer-market.html
- GuruFocus. (2025, July 22). *Oscar Health (OSCR) Projects FY25 Financial Expectations*. Retrieved from https://gurufocus.com/news/2992463/oscar-health-oscr-projects-fy25-financial-expectations-oscr-stock-news
- GuruFocus. (2025, July 22). *Oscar Health (OSCR) Anticipates Higher FY25 Revenue Amid Operational Losses*. Retrieved from https://gurufocus.com/news/2993542/oscar-health-oscr-anticipates-higher-fy25-revenue-amid-operational-losses-oscr-stock-news
- Oscar Health, Inc. (2025, July 22). *Oscar Health Announces Preliminary Financial Results for Second Quarter 2025 and Revises 2025 Guidance*. Yahoo Finance. Retrieved from https://finance.yahoo.com/news/oscar-health-announces-preliminary-financial-100000097.html
- StockTitan. (2025, July 22). *Oscar Health Announces Preliminary Financial Results for Second Quarter 2025 and Revises 2025 Guidance*. Retrieved from https://www.stocktitan.net/news/OSCR/oscar-health-announces-preliminary-financial-results-for-second-vw6hsd6emup3.html
- TacticzHazel [@TacticzH]. (2025, August 15). Post on OSCR. X. Retrieved from https://x.com/TacticzH/status/1927802470799134723
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- TacticzHazel [@TacticzH]. (2025, August 9). Post on OSCR. X. Retrieved from https://x.com/TacticzH/status/1925650498570391612
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- TradingView. (n.d.). *Oscar Health Inc*. Retrieved July 23, 2025, from https://www.tradingview.com/symbols/NYSE-OSCR/
- Yahoo Finance. (n.d.). *Oscar Health, Inc. (OSCR)*. Retrieved July 23, 2025, from https://finance.yahoo.com/quote/OSCR/
- Yahoo Finance Canada. (2025, July 22). *Oscar Health falls after revising 2025 guidance*. Retrieved from https://ca.finance.yahoo.com/news/oscar-health-falls-revising-2025-130410669.html
