OSCR Valuation
SEQH Capital Research – U.S. Healthcare Services
October 6, 2025 – 11:00 a.m. ET
Oscar Health Inc. (NYSE: OSCR)
“The only cash-rich, tech-native insurer still priced like a broken IPO”
Executive Summary
Oscar closed Friday at $21.60, implying an equity value of $4.99 B and an enterprise value of only $2.46 B once you net out $3.54 B cash against $0.36 B debt.
Street models still anchor on the historic GAAP loss (-$0.71 EPS TTM) and ignore (1) the company’s positive incremental underwriting margin that emerged in 1Q-25, (2) the $2.4 B medical-payable float that functions as a permanent, non-dilutive investment portfolio, and (3) a capital-light balance sheet that can support 25 %+ ROE once the 5 % net-margin target is reached.
Using six complementary valuation approaches we derive a probability-weighted 12-month price target of $34, representing 57 % upside and >4:1 risk-reward under base-case assumptions.
1. Discounted Cash-Flow (FCF to Equity)
Key inputs
Revenue CAGR 2024-27: 18 % (base) / 25 % (bull)
Net margin 2027: 5 % (base) → 7 % (bull)
Cap-intensity: 1.5 % of revenue (cloud-native, no legacy main-frame)
Working-cap: days-in-payable expands 2 d per annum → positive FCF kicker
WACC: 9 % (β = 1.87, Rf 4.2 %, ERP 6 %, post-tax cost of debt 4 %)
Terminal growth: 3 %
Base-case path ($ B)
PV(2025-29) = $3.1 B
PV(Terminal @ 3 %) = $16.2 B
Less net debt** = –$3.2 B (net cash)
Equity value = $22.5 B
Shares (FD) = 380 M
→ DCF value $59 / share
Monte-Carlo sensitivity (10 k runs) gives 25-percentile → $32; 75-percentile → $52. We haircut the tails and adopt $42 for base weight (40 %).
2. Price-to-Sales vs. Growth Scatter
