QS Research · Michael Burry's Scion Capital analyst template · 2006
Oscar Health, Inc. (OSCR)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +29% · downside -19% · upside +77%
The base is TTM to Sep 30 2026, not a cycle average: TTM net income is $855.5M and ROE 38.5%, while FY2020-FY2025 net income to common was negative in five of six years, so normalization would produce negative earnings and I do not use it. At today's 12.4x P/E (N22) the stock is not expensive, and the 2026-11-05/06 Q3 beat plus third FY2026 guidance raise to $850-950M is a dated catalyst that could support a modest re-rate to 16x, giving ~$39.5 (+28.9%). But Q3 2026 included a $250M risk-adjustment estimate benefit and prior-period development, membership fell after subsidies lapsed, and P/B is 4.78x, so the downside at 10x is ~$24.7 (-19.4%) and the long rule is not met. Watch, not long: I need cleaner underwriting earnings and evidence the TTM ROE survives a cycle.
Key numbers
- Share price: $30.65
- Market cap: $10.62B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $17.47B
- P/E (TTM): 12.4x
- Price / book: 4.78x
The 15 boxes
- ✓ 1. Long-form business notes
Oscar sells individual-market ACA health plans (roughly 2.0 million effectuated members at 12/31/2025, 93% of FY2025 premiums paid by CMS and 7% by members), plus a small +Oscar technology business (nearly 0.6 million client lives) and, since 2025, brokerage/enrollment assets aimed at ICHRA. Across FY2020-FY2025 the company posted an operating loss in five of six years, the sole positive year being FY2024 (+$57.3M operating income, $25.4M net income to common); FY2025 was an operating loss of $396.4M and a net loss to common of $443.2M. The product mix narrowed over the cycle from three insurance markets in the FY2021 10-K (Individual, Small Group, Medicare Advantage; 22 states; 598,169 members at 12/31/2021) to an individual-market book with an Individual & Small Group membership table only in the FY2025 10-K. Cash generation is volatile and does not track the loss line: operating cash flow was -$272.2M in FY2023 and +$978.2M in FY2024 and +$1.09B in FY2025, with $2.77B cash and $1.22B short-term investments against $977.6M total equity at 12/31/2025.
- ✓ 2. Competitive advantage
The sources show no durable competitive advantage. Over the six fiscal years FY2020-FY2025 operating income was negative in five of them (-$402.3M, -$544.5M, -$589.9M, -$235.6M, -$396.4M) with a single positive year, FY2024 at +$57.3M, and net income to common was positive only in FY2024 ($25.4M). Competition is on price, provider network breadth and broker commissions against national carriers, regional carriers, Medicaid-focused Marketplace insurers and local Blue Cross plans, and the 10-K itself concedes rivals have greater resources, broader products, larger networks and better unit costs. What the company calls proprietary - a full stack technology platform and a selected-system provider network - has no patent protection as of December 31, 2025 and is expressly exposed to imitation.
- ✓ 3. 10-Q takeaways
Q3 2026 was a sharp swing: total revenue $5,139.3M, MLR 84.0%, SG&A ratio 14.0%, earnings from operations $178.0M and net income attributable to Oscar $167.3M, versus a Q3 2025 operating loss and net loss. The quarter included a $250M benefit from updated risk adjustment estimates and $42M favorable prior-period development, so the headline profitability is not a clean run-rate. Nine-month 2026 net income attributable was $1,208.1M on $14,666.7M revenue, and membership was 2,691,885 at Sep 30 2026, up 27%. Management raised FY2026 earnings from operations guidance to $850-950M and revenue guidance to $19.0-19.3B; the 10-Q risk-factor section points back to the FY2025 10-K rather than presenting a separate update.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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