Could Cash Machine Oscar Health Stock Be Your Next Buy?

Oscar Health (OSCR) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With OSCR

OSCR is up 11% so far this year but is actually trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.

Here is what’s going well for the company. Oscar Health’s membership surged to 2 million in Q1 2025, a 45% increase year-over-year, driven by expansion into 504 markets across 18 states. The company has enhanced its competitive position for 2026, being among the lowest-priced options in 30% of its Silver markets. Operational efficiency improved, with the SG&A ratio reaching a record-low 15.8% in Q1 2025. While 2025 guidance was revised to reflect increased market morbidity, total revenue is now projected at $12.0-$12.2 billion, targeting profitability in 2026. The stock shows a positive 10.60% year-to-date return.

OSCR Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 19.0%, but Oscar Health stock does
• Strong Margin: Last 12 month operating margin of 0.0%
• Growth: Last 12 revenue growth of 37.4% – low growth, but this selection is all about high yield and margin
• Valuation: OSCR stock currently trading at 36% below 2Y high, 18% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of OSCR fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While OSCR stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. OSCR plunged about 94% during the Inflation Shock. That’s a massive hit, even with all the positives around. It shows that no matter how solid a stock looks, sharp market disruptions can still drag it down hard. Past crises have a way of impacting even the most resilient names, so keep that risk in mind. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read OSCR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell OSCR Stock.

Stocks Like OSCR

Not ready to act on OSCR? Consider these alternatives:

1. GLOBALFOUNDRIES (GFS)
2. Ryan Specialty (RYAN)
3. Vail Resorts (MTN)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Move Beyond Single Stocks With A Multi Asset Portfolio

Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices