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Wells Fargo Downgrades Oscar Health (OSCR) on Pricing Concerns

Jul 11, 2025 (5 days ago)
Negative
Wells Fargo Downgrades Oscar Health (OSCR) on Pricing Concerns
Wells Fargo downgraded OSCR to Underweight, citing inadequate 2025 pricing to cover rising costs and market acuity.

Pricing Model and Market Acuity Concerns

  • Wells Fargo downgraded OSCR to Underweight, highlighting that 2025 pricing may not adequately cover cost trends and increasing market acuity1
  • The downgrade reflects concerns about OSCR's ability to navigate challenging market dynamics, including less healthy enrollees impacting pricing strategies2

Regulatory and Policy Risks

  • OSCR faces potential policy risks, including new integrity rules, CSR funding issues, and the eventual expiration of enhanced ACA subsidies, which could pressure performance1

Financial Performance and Growth

  • OSCR reported strong Q2 results, with EPS of $0.92 (beating estimates by $0.09) and revenue of $3 billion (up 42.2% year-over-year)4
  • Fiscal year forecasts include EPS of $0.61 and revenue of $11.21 billion, representing 510% and 22.12% growth, respectively3
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