Oscar Health OSCR has returned to profitability after three consecutive quarters of losses, posting operating profits in both the first and second quarters of 2026. Rapid Affordable Care Act (ACA) membership growth, higher premiums, improved medical costs and tighter expense control drove the turnaround.
Membership reached 2.96 million as of June 30, up from 2.03 million a year earlier. Second-quarter revenues climbed 70% to $4.88 billion, while the medical loss ratio improved to 79.2% from 91.1%. A lower selling, general and administrative expense ratio also helped Oscar generate $388.6 million in operating earnings in contrast to a $230.5 million operating loss a year ago.
The question is whether those gains can hold as medical spending rises later in the year and Oscar absorbs the costs of serving a much larger member base. Oscar raised its 2026 operating earnings outlook to $600 million-$800 million and lowered its expected medical loss ratio to 81%-82%. The revenue guidance was retained in the range of $18.7 billion–$19 billion. Meeting those targets would show that the company can turn rapid membership growth into a meaningful full-year profit.
The second half presents a tougher test. Oscar earned $1.09 billion from operations in the first half, so its updated guidance implies a second-half operating loss of roughly $293 million-$493 million. Medical spending and the cost of serving a larger membership base could put pressure on results.
Oscar has shown that growth and profitability can go together. Investors now need to see whether it can preserve underwriting margins through the rest of 2026 and the next enrollment cycle.
What About Peers?
Molina Healthcare MOH is well-positioned to benefit from several long-term trends supporting government-sponsored healthcare. As of June 30, 2026, total membership of Molina Healthcare decreased 14.3% year over year to around 4.9 million. Rising healthcare utilization, an aging U.S. population and a strategic shift toward D-SNPs should support sustained membership growth for Molina Healthcare.
Centene Corporation CNC has shifted its strategy from prioritizing membership growth to improving earnings quality through disciplined pricing and portfolio optimization. Centene continues to benefit from a large and diversified membership base supported by contract wins and expansion in attractive government-sponsored programs. Centene is also shifting toward higher-quality membership, including growing PDP and dual-eligible Medicare exposure.
OSCR’s Price Performance
Shares of Oscar Health have gained 111.5% year to date, outperforming the industry.
Image Source: Zacks Investment Research
OSCR’s Expensive Valuation
The stock is overvalued compared with its industry. It is currently trading at a price-to-book multiple of 4.61, higher than the industry average of 2.71.
Image Source: Zacks Investment Research
Estimate Movement for OSCR
The Zacks Consensus Estimate for OSCR’s third-quarter and fourth-quarter 2026 earnings per share (EPS) witnessed northbound movement in the last 30 days. The consensus estimate for 2026 and 2027 earnings has moved 18.8% and 24% north, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The consensus estimates for OSCR’s 2026 and 2027 revenues and earnings indicate year-over-year decreases.
OSCR stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Oscar Health, Inc. (OSCR): Free Stock Analysis Report
Molina Healthcare, Inc (MOH): Free Stock Analysis Report
Centene Corporation (CNC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).