Analysts really do everything they can to avoid issuing outright negative ratings on publicly traded enterprises, which puts Oscar Health (OSCR) in quite a bind. Based on multiple metrics, OSCR stock is an ugly investment. For example, TipRanks’ Smart Score pegs the technology-driven health insurance company as an underperformer, giving it the lowest numerical rating. If that wasn’t enough, the consensus view among experts is a Sell.
Claim 70% Off TipRanks This Holiday Season
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
It’s difficult to argue with the analysts here. While Oscar has benefited from the Affordable Care Act’s creation of a new market that didn’t exist before — of individuals buying coverage directly, often with relatively generous subsidies — the current political debate over healthcare has crimped the business. Without ACA subsidies, Oscar’s total addressable market may take a huge hit.
Fundamentally, Oscar sits in one of the least desirable corners of capitalism: a regulated, subsidized ecosystem with low margins and political fragility (as we have seen with the government shutdown and the healthcare issue that prolonged the gridlock). Additionally, many investors dislike OSCR stock because the underlying entity lacks pricing power.
Still, it might not necessarily be a bad idea to consider a contrarian play. No, I don’t think it’s a reliable investment by any stretch of the imagination. However, OSCR stock is a wager on an eventual policy pivot. In addition, we shouldn’t assume that the bad news hasn’t been priced in. It almost surely has. At some point, then, the market’s reflexivity could make OSCR stock an intriguing contrarian opportunity.
Why Traders Have Been Asking the Wrong Question About OSCR
If you peruse the financial media ecosystem, the common thread connecting these stories is that they attempt to answer — with varying rigor — a universal question: where will this stock go? It’s an understandable line of inquiry. However, it’s a suboptimal framework.
Over the past few months, my work has diverged significantly from typical financial publications. Most readers will chalk that up to my sequencing logic, but that’s more of a procedural distinction, something to make the analysis easier to formulate and digest.
No, what makes me different is that I’m not trying to answer where a stock will go; I’m trying to answer at what point it stops going.
In the original inquiry, the wording implies continuity. In other words, if a forecast calls for OSCR stock to reach $20, the natural response may be to ask why not $25 or even $30? However, if my argument is that OSCR will statistically stop rising higher at $20, that’s an entirely different paradigm. Essentially, I would say the bulls would get exhausted trying to push the security any higher.
Therefore, it would behoove speculators to only pay for forward value that is likely to materialize. In other words, you don’t want to buy a $30 call option if that version of reality in the market’s multiverse is about to be extinguished.
Instead, you would consider a $20 call or an option with an even lower strike price. Such an approach would allow you to target a realistic scenario rather than chasing unrealistic fantasy projections. How, then, do we calculate such probabilities?
It comes down to changing the way we view the market. Traditionally, investors engage securities like OSCR stock as a single-path domain. That’s not wrong, just limited. After all, the options market prices the possibility of alternate realities. By logical and structural necessity, the options market confirms that the equities arena is a multiverse. To unlock its probabilistic mysteries, we must rely on distributional analysis.
A Novel Method of Assessing OSCR Stock
If we accept the equities market as a multiverse, then, by definition, the underlying environment is distributional. In other words, a multiverse makes sense only if multiple outcomes of unequal weight exist, with an eventual outcome standing as the only timeline.
Also, if we think of markets as multiverses, we inherently reject point forecasts, single trajectories, and deterministic paths. Subsequently, this framework throws fundamental and technical analysis out the window. Instead, we must rely on distributional analysis to help navigate the multiverse.
Rather than viewing OSCR stock as a single journey over time, we can discretize and iterate this data strand into multiple 10-week sequences or trials. One cycle of a single 10-week journey isn’t going to tell us anything. However, hundreds of cycles reveal structure. Even better, we can isolate the current quantitative signal and determine where OSCR may end up using historical analogs.
For example, in the past 10 weeks, OSCR stock printed a 2-8-D sequence: two up weeks and eight down weeks, with an overall downward slope. Under this setup, the forward 10-week returns of OSCR stock are likely to range between $12 and $31, with price clustering likely to occur around $18 to $19.
What’s fascinating, though, is that from $20 onward, probability density begins to fall sharply. Stated differently, probability decay accelerates conspicuously past the $20 mark. Given this backdrop, there are two trades to consider.
First, the most aggressive strategy is arguably the 17/20 bull call spread expiring Jan. 16, 2026. This wager requires two simultaneous transactions: buy the $17 call and sell the $20 call, for a net debit paid of $95. Should OSCR stock rise through the second-leg strike (20) at expiration, the maximum profit is $205, a payout of nearly 216%.
Second, one might consider the same 17/20 geometry but for the March 20 options chain. Here, the payout is 173%. However, you have a much longer time to expiration.
While I would prefer the February monthly options chain, due to current volume levels, such trades are not available. Thus, market participants must make some decisions based on their risk tolerance.
Is OSCR Stock a Buy, Sell, or Hold?
Turning to Wall Street, OSCR stock carries a Moderate Sell consensus rating based on one Buy, two Holds, and three Sell ratings. The average OSCR price target is $16.22, implying ~1.3% downside risk over the next 12 months.
Deflated OSCR Stock May Still Deliver an Upside Surprise
Although Oscar Health is heading into a turbulent political and regulatory environment, much of the downside risk may already be reflected in OSCR’s current valuation. In that context, the balance of risk and reward begins to shift. A reactionary move—driven by positioning, sentiment shifts, or incremental news that is merely “less bad” than feared—could be enough to push the stock higher.
Moreover, historical price behavior supports this view: when past data is examined through a distributional analysis framework, similar setups have tended to resolve with upside over the following several weeks, suggesting that a near-term rebound is a plausible outcome.