Rose Celine Investments
Equity Investor
Oscar Health cannot be a great business because insurance, like banking, is uninvestable when its economics are nearly impossible to predict. One bad cycle or change in costs can wipe out margins that are already nonexistent. A post the author replies to argues Oscar avoided the 30-40% member drop the market expected after enhanced premium tax credits expired. x.comÂ
Oscar Health is too hard to invest in given the state of the ACA, uncertainty over how much ICHRA can add and uncertain risk-adjustment liabilities. A full-year medical loss ratio below 80% would force rebates, though Oscar can still cut its expense ratio. Democrats winning at least partially in the midterms could bring more favorable terms for Oscar later. x.comÂ
Oscar Health looks too extended after its big move and should pull back around earnings in the next few days; it is not a tech stock with a niche product capable of parabolic moves. x.comÂ
Oscar Health has turned the corner and is on the verge of a dramatic profitability inflection, yet trades at under 15x free cash flow. It projects $800 million in earnings from operations, a 1,000-basis-point improvement in its medical loss ratio and over $350 million of free cash flow this year, with more than $4.5 billion of net cash. The stock is headed to $30 by the end of 2026, after a painful year in which the call did not deliver. x.comÂ
Oscar Health is essentially a leveraged bet on Affordable Care Act subsidies surviving, and the enhanced premium tax credits are sunsetting. A full lapse would mean roughly a 114% spike in subsidized premiums and enrollment cratering into 2027. Q2 was a monster print, with EPS of $1.10 versus $0.39 expected, but the real test comes next year. x.comÂ
Hyped growth stocks can be poor investments even when their businesses grow, because valuations already assume they will become exceptional. Retail buyers often arrive after the promise is widely recognized, before tougher competition separates lasting winners from the rest. Eight of the nine previously warned-about stocks have fallen, though Oscar Health has gained. x.comÂ
Oscar Health's free cash flow growth should keep driving its shares, since share prices follow free cash flow. Q2 free cash flow rose 320% to $2.1 billion from $500 million a year earlier, while the stock rose 85% over that time. x.comÂ
Oscar Health's raised 2026 guidance changes nothing fundamentally, so its 18%+ premarket jump is unlikely to hold. Operating earnings guidance rose to $500-700M from $250-450M, but Oscar had already booked $704M in Q1 alone, more than the new top end, with Q3 and Q4 seasonally bringing losses. 2027 could be challenging as management targets a 5% margin, and the stock looks fairly valued around $34. x.com x.comÂ
Oscar Health will struggle to climb while Trump keeps attacking insurers in headlines, unless a midterm blue wave or polling pointing to one emerges. Arguments that people will use money to buy Oscar plans matter little under that narrative, and some may skip coverage entirely. Elevance, UnitedHealth and Cigna are the safer way to add insurer exposure here, since employer-sponsored plans are safest, followed by government-sponsored plans, which would gain more from a blue wave. x.com x.comÂ
Oscar Health's scale is finally producing real operating leverage as its medical loss ratio improves, undercutting the view that it is uninvestable. Q1 revenue rose 53% to $4.65 billion, operating earnings 137% to $704 million, net income 147% to $679 million and basic EPS 107% to $2.28. x.comÂ
EverQuote is an insurance lead-generation middleman in a cyclical business during unpredictable times, with a potential threat if LLMs like GPT start connecting people directly to the best quotes. The financials are better than expected: strong revenue growth, gross profit outpacing operating expenses and booming free cash flow, though growth slowed. Technically, support sits near $14 and resistance near $25. Despite the good financials, the long-term idea does not appeal. x.comÂ
