According to the Centers for Medicare and Medicaid Services, Americans spent $4.4 trillion on healthcare in 2022, ~$3 trillion of this spending flowed through health insurance companies. Healthcare spending is forecast to top $7 trillion in 2031. What makes Oscar unique is that it uses artificial intelligence to cut out waste.
Oscar’s tech platform acts like a personal wellness assistant
SHARE DATA, MARKETCAP, CORPORATE INFO:
Oscar Health, Inc.
Stock symbol OSCR (on NYSE)
Share Price $17.37
Market Cap $4.11 Billion
Shares Outstanding 201.47 Million
Company website: https://www.hioscar.com
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Investment Thesis: Now appears the time to buy Oscar shares, before the big-money investors recognize Oscar’s growth potential and start driving the stock higher.
When the founders of Oscar Health first looked at the health insurance business they saw an industry that was inefficient, wasteful, and impersonal. They saw the opportunity to create a health insurance company that used cutting-edge technology to offer better care at a more affordable price. They created Oscar Care Teams to usher members through a healthcare system that has long been a source of consumer confusion and frustration. Oscar’s tech platform acts like a personal wellness assistant. It uses AI to track member health conditions and provide personalized insights.
Healthcare consumers are starting to see the value that Oscar’s tech platform provides.
Oscar now has some of the industry’s highest customer satisfaction ratings as measured by net promoter score (NPS).
[NPS measures customer loyalty by assessing their likelihood of recommending the company’s services.]
The number of people Oscar is helping is growing rapidly.
As of January, the company had 1.3 million members – up 30% from last year.
As Oscar uses its technology to reduce costs, it can pass on some of those savings to customers. It can also make a larger profit for itself.
However that’s not the story that Wall Street analysts are sharing.
Last year, Oscar pumped the brakes on growth. It wanted to focus on becoming profitable first. As a result growth-focused tech investors have been ignoring this stock. Our trading desk expects this to change starting as early as next month. That’s when Oscar reports its first-quarter results and its outlook for the rest of the year.
This is the first quarter that Oscar has returned to focusing on growth. Oscar management will also be able to showcase the disruptive potential of its AI-powered health insurance platform at the company’s Investor Day on June 7.
These upcoming events will likely attract a whole new class of growth fund managers. Oscar has potential to 2X near-term and Oscar has the potential to eventually become one of the largest health insurance providers in the U.S.
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