Our Stock of the Week is Oscar Health (OSCR). OSCR sells health insurance to people who buy coverage on their own through the Affordable Care Act exchanges. Nearly all of its customers receive a government subsidy, which is why the stock tends to move following related headines out of Washington. The stock is up more than 100% this year, and after making a new high on October 13th, it could be offering attractve entry points after pulling back toward support.
For some context, the expanded subsidies from the pandemic years expired at the end of 2025, and the individual insurance market shrank by double digits. Despite the headwind, OSCR grew membership about 46% over the past twelve months while its medical loss ratio (the share of premiums paid out in claims) fell to 79% in the June quarter from 91% a year earlier. The company priced its plans for profit and as competitors faded, OSCR was able to pick up the slack. The first half of 2026 was the most profitable in its history, and management has raised full-year earnings guidance twice since February.
Meanwhile, the recent pullback followed Georgia regulators approving 2027 rates, with OSCR’s average increase among the largest of the insurers in the state, which the market read as a company about to price itself out of growth. That fits management’s stated approach of letting the market shrink rather than chase members at a loss, but one state’s filing doesn’t change the story. The Street is lukewarm, with an average rating of hold and an average price target of about $36, ranging from $27 to a high of $49, with Barclays and Piper Sandler at $49 and $48, respectively. Oscar trades around 14x next year’s expected earnings.
It’s also worth noting that the second half of the year is guided to a loss, which is how the business tends to work. Members use up their deductibles as the year goes on, so costs rise into December and profit is front-loaded, That said, while the consensus for Q4 is a loss, each time the company has raised guidance, that implied loss has gotten smaller.
Technically, the pullback has brought OSCR to just above its 50-day moving average, which also lines up with the level it broke out from in early October. The $30 area, where the stock reported second-quarter earnings, is the next support below that. Open enrollment for 2027 starts November 1 and the third-quarter report comes November 5, so we’ll learn whether membership is holding. As long as the 50-day holds, we’d look to build a position incrementally, and we’d treat a break of the $30 area before the report as a sign we’re wrong. And, as always, we’d avoid chasing any early strength on Monday morning.
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This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing no positions in OSCR at the time this was published. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
