Oscar Health Stock Has ~20X Upside, If Policy Aligns скачать в хорошем качестве

Oscar Health Stock Has ~20X Upside, If Policy Aligns

Two things are true: Oscar Health likely has a notable ability to deliver more value to customers per dollar spent, as evidenced by the rapid user growth seen over the last year. It’s taken Oscar Health 11 years to gain its first million members and just 15 months to add its second million subscribers. The company trades at 0.4 times sales because investors are concerned congress won’t renew the enhanced ACA (Affordable Care Act) premium tax credits at the end of 2025. But Republicans currently control both chambers of Congress and 64% of Oscar’s ACA membership comes from red states. Thus, if one is willing to play the political odds, Oscar Health is looking like a highly asymmetric bet. Oscar’s fair value is probably in the 8 to 10 times sales range, which means that the valuation could expand between 20 and 25 times once/if the regulatory fears dissipate. The upside is still appealing if one assumes fair value is 4 times sales, which would be rather conservative for a company growing revenue at 50%+ YoY. Not renewing subsidies would make health insurance much more expensive for folks, which would disproportionately upset Republican voters. And thus, the Republican party is unlikely to go against its own interests. The rapidly growing subscriber base is a strong signal, because according to Oscar co-founder and CTO Mario Schlosser they only had the lowest cost plan in 2022 in 5% of its markets. In this podcast at minute 14:05 Mario explains how Oscar Health shares economy of scale with customers, by passing efficiency gains back to patients in the form of lower prices. Thus, the recent growth acceleration is likely driven by lower prices, but also signals users responding to a rapidly widening value to price ratio.