Oscar Health’s first quarter was marked by strong membership growth and improved cost efficiency, resulting in performance that exceeded Wall Street’s expectations. Management emphasized that the increase in revenue was primarily driven by a 41% rise in effectuated members, supported by high retention rates and above-market growth during the open enrollment period. CEO Mark Bertolini also highlighted the company’s lowest-ever selling, general, and administrative (SG&A) expense ratio, attributing the improvement to technology-driven operational efficiencies and disciplined expense management. This combination of top-line growth and lower costs led to a significant expansion in operating margin.

Is now the time to buy OSCR? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Oscar Health’s Q1 Earnings Call

• John Ransom (Raymond James) asked about membership trends for the rest of the year; CEO Mark Bertolini projected an initial increase followed by a decline as special enrollment period changes take effect, resulting in year-end membership similar to initial forecasts.
• Stephen Baxter (Wells Fargo) inquired about the impact of grace period membership and risk adjustment on MLR seasonality; Bertolini and CFO Scott Blackley explained normalization of grace period levels and detailed that risk adjustment true-ups accounted for most of the year-over-year MLR increase.
• Jonathan Yong (UBS) questioned differences in utilization between new and existing members and the outlook for pharmacy costs; Bertolini noted elevated inpatient utilization but favorable pharmacy trends, with initiatives in place to manage overall medical costs.
• Joanna Gajuk (Bank of America) raised concerns about regulatory proposals potentially reducing exchange enrollment; Bertolini acknowledged potential headwinds but emphasized Oscar’s support for market integrity and the importance of adequate enrollment periods for consumers.
• Michael Ha (Baird) explored the drivers and durability of SG&A improvements; Blackley credited technology and fixed cost leverage, while cautioning that quarterly SG&A ratios may rise modestly but most improvements are expected to be sustainable.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be monitoring (1) the impact of regulatory actions on membership flows and risk pool dynamics, (2) the durability of SG&A improvements as technology initiatives scale, and (3) progress in expanding employer-sponsored (ICRA) business. Additionally, continued management of medical cost trends and adaptation to shifts in CMS policy will be critical markers of Oscar’s ability to sustain profitability.

Oscar Health currently trades at $20.84, up from $13.09 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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