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Investing.com - Oscar Health Inc (NYSE:OSCR), currently trading at $13.56, maintained its Neutral rating and $14.00 price target from Piper Sandler following the company’s pre-announcement of second-quarter 2025 results and reduced guidance for the full year. According to InvestingPro analysis, the company appears undervalued despite recent market volatility.
The health insurer cited higher acuity in the individual Affordable Care Act (ACA) Marketplace as the primary reason for cutting its 2025 outlook. Despite these challenges, InvestingPro data shows Oscar Health maintaining strong revenue growth of 54.26% over the last twelve months, with total revenue reaching $10.08 billion. The company’s assessment was based on Wakely data covering paid claim submissions through April 30, 2025, for most ACA Marketplace issuers across Oscar Health’s markets.
Piper Sandler’s model now assumes an improvement in Medical (TASE:BLWV) Loss Ratio (MLR) in 2026 and 2027 compared to projected 2025 highs. The firm noted that Oscar Health plans to refile 2026 rates covering 98% of lives to account for the increased morbidity observed year-to-date in 2025.
Despite these adjustments, Piper Sandler expressed ongoing concerns about individual Marketplace profitability in light of next year’s subsidy reversion and provisions in the Omnibus Budget Reconciliation Act and the Marketplace Final Rule.
Oscar Health’s guidance reduction follows a trend of challenges in the ACA Marketplace segment, where insurers have faced difficulties accurately pricing for risk amid changing regulatory conditions and shifting enrollment patterns.
In other recent news, Oscar Health has raised its full-year revenue forecast to between $12 billion and $12.2 billion, surpassing the previous guidance of $11.20 billion to $11.30 billion and exceeding the average analyst estimate of $11.32 billion. Despite this positive adjustment, the company’s shares experienced a decline in premarket trading. Piper Sandler has downgraded Oscar Health from Overweight to Neutral, reducing the price target from $18.00 to $14.00, due to concerns about the Affordable Care Act (ACA) market. Jefferies has also lowered its price target for Oscar Health to $9.00 from $12.00, maintaining an Underperform rating because of risk adjustment concerns. Barclays (LON:BARC) initiated coverage on Oscar Health with an Underweight rating and a $17.00 price target, following the company’s outlined path to achieve over $2.25 earnings per share by 2027. Piper Sandler further adjusted its outlook by cutting the price target to $18.00 from $25.00, while maintaining an Overweight rating, amid potential policy changes impacting the ACA marketplace. These developments highlight the challenges and strategic adjustments Oscar Health is navigating in the current market landscape.
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