Oscar Health: Regulatory Risks Overshadow Growth Opportunities, Leading to Sell Rating

Joanna Gajuk, an analyst from Bank of America Securities, reiterated the Sell rating on Oscar Health (OSCR – Research Report). The associated price target is $13.50.

Joanna Gajuk’s rating is based on several factors impacting Oscar Health’s outlook. Despite reporting solid first-quarter results with strong membership growth and a reduction in SG&A costs, the company faces significant regulatory challenges. The anticipated end of Special Enrollment Period enrollments and potential regulatory changes could lead to a decrease in membership, which is a concern for future growth.
Moreover, while the company maintained its 2025 guidance, the uncertainty surrounding new regulations and their negative impact on exchange enrollment remains a significant risk. This uncertainty is compounded by the potential expiration or reduction of enhanced subsidies, which could further affect membership numbers. Although there are opportunities for market share gains due to Aetna’s exit from the exchange business, these are overshadowed by the regulatory risks, leading to the Sell rating.