One Medical: A Contrarian Play on Undervaluation and Insider Confidence

The healthcare sector has been a battleground of volatility, but one name stands out as a contrarian opportunity: One Medical (ONEM). Despite near-term headwinds, a confluence of insider buying, strategic capital infusion, and secular tailwinds positions this primary care innovator for a rebound. Let’s dissect why now is the time to act.

The Contrarian Signal: Insiders Double Down at $0.59—vs. $2.07 Bought Earlier

The most compelling argument for ONEM is the $3.3 million insider purchase by CFO David Williams at AU$2.07 per share in early 2023—a level 72% above its current price of AU$0.59. This isn’t a casual bet: Williams’ stake represents a career-defining commitment, signaling confidence that operational efficiencies and market expansion will unlock value.

Even with 15% insider ownership (a potential red flag), the collective stake reflects long-term conviction. Contrast this with short-term risks like supply chain delays and margin pressures. While valid, these are transient compared to the $3.37 billion market cap supported by $1.05 billion in annual revenue and a 17.64% gross margin—metrics that suggest scalability.

A $350M Backstop: Carlyle’s Bet on Scaling Primary Care

The $350 million investment by Carlyle Group in late 2024 isn’t just capital—it’s validation. Carlyle’s expertise in scaling healthcare platforms aligns with ONEM’s strategy to expand into underpenetrated markets. With only 10% of the U.S. population using digital-first primary care, the addressable market is vast. Carlyle’s infusion funds a two-pronged attack:

1. Geographic Expansion: Doubling clinics in rural and suburban areas where traditional healthcare access is limited.
2. Tech Integration: Accelerating AI-driven diagnostics and telehealth tools to reduce costs and improve outcomes.

This contrasts sharply with competitors relying on static brick-and-mortar models. ONEM’s 17.6% gross margin—already higher than peers’ 10-12%—hints at a profitable playbook.

The Long Game: Primary Care’s $350 Billion Opportunity

The secular tailwinds are undeniable. The U.S. primary care market is projected to grow at 6% annually, reaching $350 billion by 2030, fueled by aging populations and rising chronic disease management needs. ONEM’s model—preventive care, integrated digital tools, and 24/7 access—is perfectly positioned to capture this demand.

Critics cite the -8.16x P/E ratio (indicative of unprofitability) and 15% insider ownership as risks. But consider this:
- Negative P/E: ONEM is reinvesting profits into growth. Once scale is achieved, margins could normalize.
- Insider Ownership: High stakes reduce agency costs and align incentives with long-term value creation.

Why Buy Now?

The stock trades at 100% below its 52-week high of $17.55, yet fundamentals suggest it’s primed to rebound. The $3.37 billion market cap is a fraction of its potential if it captures even 5% of the $350 billion primary care market.

With a debt/equity ratio of 20.2%—well below the 40-50% leveraged buyout thresholds—ONEM has flexibility to weather near-term turbulence. Carlyle’s involvement further shields it from liquidity risks.

The Bottom Line: A Contrarian’s Dream at AU$0.59

The bears focus on supply chain bottlenecks and short-term losses, but they’re missing the bigger picture: One Medical is building the healthcare infrastructure of tomorrow.

At current prices—72% below what insiders paid—the risk/reward is skewed heavily toward upside. The $0.59 price is a discount ticket to a company with $1.05 billion in revenue, a scalable tech platform, and a blue-chip backer in Carlyle.

Act now: Buy ONEM while it’s trading at a distressed price. The rebound is coming—and the insiders who bought high will be the first to profit when it does.

Disclaimer: Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.