Here’s What You Should Understand Besides the Reasons Oscar Health, Inc. (OSCR) is Gaining Attention

Oscar Health (OSCR): Recent Performance and Outlook

Oscar Health, Inc. (OSCR) has recently attracted significant attention from investors. If you're considering this stock, it's important to review the factors that could influence its short-term trajectory.

Stock Performance Overview

In the past month, Oscar Health's share price has declined by 8.5%, while the Zacks S&P 500 composite index saw a modest gain of 0.6%. The broader insurance multiline sector, which includes Oscar Health, experienced a 0.6% decrease during the same period. This raises the question: what might be next for OSCR?

What Drives Stock Movement?

Although news headlines and speculation can cause quick shifts in stock prices, long-term investors typically focus on fundamental factors when making decisions.

Changes in Earnings Projections

Zacks places a strong emphasis on tracking changes in earnings forecasts, as these are often key indicators of a stock's true value. When analysts raise their earnings estimates, it generally signals that the stock could be undervalued, prompting increased investor interest and potential price appreciation. Research consistently shows a close link between earnings estimate revisions and short-term stock price movements.

Currently, Oscar Health is projected to report earnings of $1.21 per share for this quarter, reflecting a 31.5% increase compared to the same period last year. Over the past month, the consensus estimate has risen by 43.2%.

For the full fiscal year, analysts expect earnings of $0.20 per share, which would be a 111.8% improvement from the previous year. This estimate has jumped 168.5% in the last 30 days.

Looking ahead to the next fiscal year, the consensus forecast is $1.06 per share, representing a 430% increase from the prior year, with no changes to the estimate in the past month.

Zacks' proprietary ranking system, which incorporates earnings estimate trends, currently rates Oscar Health as a Rank #3 (Hold), suggesting the stock may perform similarly to the overall market in the near term.

The following chart illustrates the trend in Oscar Health’s forward 12-month consensus EPS estimate:

Revenue Growth Projections

While earnings growth is crucial, sustained revenue increases are essential for long-term profitability. For the current quarter, Oscar Health is expected to generate $4.89 billion in sales, a 60.6% rise year-over-year. The consensus for the current fiscal year is $18.91 billion (up 61.6%), and for the next fiscal year, $21.16 billion (an 11.9% increase).

Recent Results and Earnings Surprises

In its most recent quarter, Oscar Health reported revenues of $2.81 billion, up 17.3% from a year earlier. The company posted an EPS of -$1.24, compared to -$0.62 in the same period last year.

These results were below expectations, with revenues missing the consensus estimate by 12.49% and EPS falling short by 47.62%. Over the past four quarters, Oscar Health has exceeded consensus EPS estimates three times but has only surpassed revenue expectations once.

Valuation Analysis

Assessing a stock’s valuation is essential for making informed investment choices. Comparing current valuation ratios—such as price-to-earnings, price-to-sales, and price-to-cash flow—to historical averages and industry peers helps determine whether a stock is fairly priced.

Zacks’ Value Style Score, which evaluates both standard and alternative valuation metrics, assigns Oscar Health a grade of B. This suggests the stock is trading at a discount relative to its industry peers.

Conclusion

The data and analysis presented here, along with additional resources on Zacks.com, can help you decide whether Oscar Health merits further attention. With a Zacks Rank #3, the stock is expected to perform in line with the broader market in the short term.

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