Oscar Health (OSCR) Shares Surge 5.71% to 2025 High on Strategic Shifts and Cost Cuts

Oscar Health (OSCR) shares surged 5.71% on Wednesday, marking a three-day rally that pushed the stock to its highest level since September 2025, with an intraday gain of 5.82%. The recent momentum reflects investor optimism around the company’s strategic initiatives and long-term profitability roadmap despite near-term financial challenges.

Despite a Q2 2025 net loss of $228.4 million and a medical loss ratio (MLR) of 91.1%—driven by post-pandemic healthcare demand, specialty drug costs, and risk adjustment accruals—Oscar has reiterated its 2026 profitability targets. The company anticipates MLR normalization by 2026 as utilization trends stabilize, though analysts caution that medical inflation could persist without aggressive premium adjustments.

Operational efficiency remains a key focus, with SG&A expenses dropping to 18.7% of revenue in Q2 2025. Cost-saving measures, including workforce reductions and AI-driven automation, have yielded $60 million in savings, supporting efforts to narrow operating losses. These initiatives align with Oscar’s broader strategy to leverage technology for care coordination and administrative efficiency, reducing fixed costs while maintaining member satisfaction.

A strategic pivot to Individual Coverage Health Reimbursement Arrangements (ICHRA) is reshaping Oscar’s revenue model. The Hy-Vee co-branded ICHRA plan, operating through 570 retail locations, combines retail access with concierge care, while acquisitions like IHC Specialty Benefits and HealthInsurance.org enhance control over distribution and customer education. This shift diversifies Oscar’s income streams, reducing reliance on ACA subsidies and mitigating regulatory risks.

Investor sentiment remains mixed. While Oscar trades at a price-to-sales ratio of 0.5x—well below industry peers—its 29% year-over-year revenue growth to $2.86 billion and expansion into 165 new counties highlight long-term scalability. However, analysts have downgraded the stock, with a consensus price target of $12.07, reflecting skepticism about ACA policy shifts and near-term profitability hurdles. Institutional investors have made modest adjustments, but 75.7% of shares remain institutional-owned, signaling cautious optimism.

Regulatory uncertainties, including potential changes to ACA risk adjustment methodologies and tax credit expiration, pose ongoing risks. Oscar’s ICHRA expansion and partnerships aim to mitigate these challenges, but execution of rate hikes and SG&A discipline will be critical to meeting 2026 targets. The company’s +Oscar digital platform, which integrates telehealth and wellness tools, also differentiates it in a competitive market, potentially reducing medical costs through proactive care management.

With membership growth of 28% in Q2 2025 and a strong liquidity position, Oscar remains positioned for long-term growth. However, the stock’s trajectory hinges on successful normalization of MLRs and execution of its 2026 profitability roadmap, balancing near-term headwinds with strategic innovation in a rapidly evolving healthcare landscape.