Oscar Health, Inc. (NYSE: OSCR) has reported its first-ever profitable quarter in Q1 2024, marking a significant turnaround with a total revenue of $2.1 billion, a 46% increase year-over-year. The company also reported a net income of $178 million, compared to a loss in the previous year, and an improved medical loss ratio (MLR) of 74.2%. Membership grew by 42%, reflecting high retention rates and solid growth in both existing and new markets.
Key Financial Highlights:
- Revenue: Oscar Health’s total revenue for Q1 2024 was $2.1 billion, reflecting a 46% increase from the previous year.
- Net Income: The company reported its first positive net income of $178 million.
- Medical Loss Ratio (MLR): Improved to 74.2%, a 210 basis point enhancement from the previous year.
- Adjusted EBITDA: Reached $219 million, a substantial increase of $168 million from the previous year.
- Membership Growth: Increased by 42%, with the company achieving high retention rates.
Strategic Plans:
- Oscar Health is focusing on long-term growth in the individual market and plans to discuss its strategy to enter the Medicare market during the upcoming Investor Day on June 7.
- Despite the early stage of the year making full-year performance visibility limited, the company is optimistic about reaching its adjusted EBITDA goals for the year.
Challenges and Opportunities:
- The addition of Special Enrollment Period (SEP) members may adversely affect the MLR.
- The company sees significant opportunities in the Individual Coverage Health Reimbursement Arrangement (ICHRA) and health IT sectors, with positive revenue expectations continuing for its partnership with Cigna.
Investor Outlook:
- Oscar Health’s financial performance in Q1 2024, complemented by strong growth metrics, highlights the company’s strategic initiatives and growth potential.
- The company’s stock has demonstrated significant returns, with a 164.57% increase in price total return over the past year, and consistent gains over shorter time frames.
The upcoming Investor Day is anticipated to provide further details on Oscar Health’s strategic initiatives and potential market expansions. Despite challenges, the leadership expresses confidence in the company’s ability to compete effectively and continue its growth trajectory in the healthcare sector.