Episode Details

Oscar Health (OSCR) Q2 2026 — Q2 2026 (3 months ended June 30, 2026): Total revenue $4,880.2M +70.4%. GAAP diluted EPS $1.10 vs a $0.40 bar - a 173% BEAT. Medical loss ratio 79.2% from 91.1%. Earnings from operations $388.6M vs a $230.5M LOSS. Effectuated membership 2,963,002, +46.2%. First half: operating earnings $1,092.7M, EPS $3.16. FY2026 operating earnings guidance RAISED to $500-700M from $250-450M; revenue guidance unchanged at $18.7-19.0B. The 8-K was accepted 6:08am ET, BEFORE the open, so Thursday Aug 6 is the reaction session: $30.11 to $26.54, -3.60%. Oscar Health beat the bar by 173%, posted the most profitable half-year in its history, and RAISED full-year guidance - and the stock fell 3.6% that day. One subtraction explains it. First-half earnings from operations were $1,092.7M against raised full-year guidance of $500-700M, so the guide itself promises a second-half operating LOSS of $393M to $593M. Nobody normalised it. The first-half to second-half operating margin swing was 9.9 points in 2024 and 9.1 points in 2025, and the 2026 guide requires 15.7 to 17.9. The 10-Q names the cause - 250,000 to 300,000 members, 8% to 10% of the book, are expected to be RETROACTIVELY disenrolled under CMS program-integrity rules. THE CALL: HOLD (3/5, FAIR VALUE $22.15 vs THE $27.90 CLOSE - 20.6% BELOW THE PRICE, AND BELOW WALL STREET) — base-case value ~$22.15 vs ~$27.9 today. KEY METRICS: - CALL: HOLD 3/5, fair value $22.15 vs the $27.90 Aug 7 close = -20.6%. Bull $37.55, bear $6.20, buy under $18.80. 2027 base: $19.5B revenue at a 4.0% margin = $1.95 EPS at 11.5x. At $27.90 you pay for a 5.0% margin - management's own 2027 target. - Street: Hold (3 buy, 6 hold, 2 sell). Consensus target $26.86, median $27. Barclays $39 on Aug 6, Baird $27 on Aug 7, Jefferies $16 on Apr 20. We are 18% below consensus. What to watch: UP: membership grew 46% to 2,963,002 in the FIRST year after the enhanced Advance Premium Tax Credits expired - falsifying the 2026 subsidy-cliff bear case. The loss ratio before risk adjustment improved 10.4 points to 60.1% - a BIGGER gain than the 8-point reported MLR improvement, because Oscar's risk-adjustment payment rose from 15.6% to 19.8% of direct premium and masks it. Equity more than doubled to $2.06B and a $2.25B loss carryforward held the first-half tax rate to 3.8%. Management's own June 2024 Investor Day target is a 5% 2027 operating margin. DOWN: the raised guide requires a $393-593M second-half operating loss and a 17-point margin swing where nine is normal. 250,000 to 300,000 members are being RETROACTIVELY disenrolled by CMS. 91% of premium is federal subsidy money. $4.71B of first-half operating cash flow is 81% CMS float. And the Street's own 2027 estimates run from $0.05 to $2.58 a share. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.