Two Undervalued Stocks with High Upside Potential in 2026: Coupang and Oscar Health

In the ever-evolving landscape of value-driven growth investing, identifying opportunities in distressed but resilient sectors can yield outsized returns. As 2026 approaches, two stocks-Coupang (CPNG) and Oscar Health (OSCR)-stand out as compelling candidates. Both operate in sectors facing structural headwinds-e-commerce and healthcare insurance-yet demonstrate operational resilience, strategic innovation, and valuation asymmetry that position them for long-term upside.

Coupang: Scaling E-Commerce Amid Margin Pressures

Coupang's Q3 2025 results underscore its ability to navigate a competitive e-commerce environment. The company reported $9.27 billion in revenue, a 17.8% year-on-year increase, with GAAP EPS of $0.05 exceeding estimates by $0.01. Adjusted EBITDA surged 27.3% to $413 million, driven by a 50-basis-point improvement in gross profit margins and a 10% year-on-year rise in active customers to 24.7 million. These metrics highlight Coupang's operational discipline, even as global e-commerce faces margin compression from rising logistics costs and regulatory scrutiny.

Coupang's international expansion, particularly in Taiwan and Singapore, further insulates it from domestic market saturation. Its Developing Offerings segment grew between 31% and 146% year-over-year, leveraging its high-margin WOW membership model and AI-driven logistics. A recent data breach, which affected only 3,000 customers, was swiftly resolved, restoring investor confidence and preventing reputational damage.

Valuation-wise, Coupang trades at a forward P/E of 48x, significantly higher than peers like Alibaba (10x) and PDD Holdings (10x). While this premium reflects skepticism about its long-term margins, a discounted cash flow model suggests an intrinsic value of $36.46 per share, implying a 36.4% discount to current prices. This divergence between market sentiment and fundamental growth potential creates a compelling case for value-driven investors.

Oscar Health: Navigating Healthcare Insurance Turbulence

Oscar Health's 2024 performance illustrates its adaptability in a volatile healthcare insurance sector. Total revenue reached $9.2 billion, a 56.5% year-on-year increase, driven by membership growth and improved SG&A efficiency (19.1% expense ratio, down 520 bps year-over-year). For 2025, the company projects $11.2–$11.3 billion in revenue and $225–$275 million in earnings from operations, despite a Medical Loss Ratio (MLR) of 80.7–81.7%.

The healthcare insurance sector faces existential risks, including a projected decline in commercial plan enrollment and potential ACA subsidy expiration, which could contract Oscar's market by 20–30%. However, Oscar's $1 billion in excess capital and strategic initiatives-such as AI-powered fraud detection, AI health assistant Oswell, and expansion into 70 new counties-position it to mitigate these risks.

Valuation metrics paint a mixed picture. Oscar's P/E ratio of -14.11 (as of December 2025) reflects current unprofitability, but its price-to-sales ratio of 0.4x is significantly lower than the industry average of 1.1x. This suggests the market is underpricing its revenue base and long-term scalability. Analysts project a path to profitability by 2026, with disciplined pricing and geographic expansion driving margin recovery.

Comparative Analysis and Investment Thesis

Both Coupang and Oscar Health operate in sectors marked by structural challenges but exhibit resilience through innovation and operational efficiency. Coupang's high P/E ratio reflects skepticism about its margins, yet its DCF-derived intrinsic value and international growth trajectory suggest undervaluation. Oscar Health, while unprofitable, trades at a discount to peers and is poised to benefit from healthcare insurance sector tailwinds if ACA subsidies are extended.

For value-driven investors, these stocks represent asymmetric opportunities. Coupang's AI-driven logistics and international expansion could unlock margin upside, while Oscar Health's AI tools and geographic diversification may insulate it from ACA enrollment volatility. Both companies are leveraging technology to address sector-specific pain points, a critical factor in long-term resilience.

Conclusion

In a market where traditional growth stocks trade at premium valuations, Coupang and Oscar Health offer a compelling alternative: undervalued, high-growth businesses in distressed but strategically important sectors. While risks remain-such as regulatory shifts in healthcare and e-commerce margin pressures-their operational execution and innovation provide a strong foundation for 2026. For investors willing to navigate near-term volatility, these stocks represent a rare combination of value and growth potential.