Oscar Health, Inc. OSCR raised its 2026 earnings from operations outlook to a range of $500 million to $700 million from $250 million to $450 million after a second quarter marked by improved underwriting and expense efficiency. The company kept its 2026 revenue view at $18.7 billion-$19 billion.
The higher profit range shifts the investor debate from growth alone to margin durability. Oscar's pricing, medical loss performance and technology leverage improved sharply, but the second half brings higher churn, seasonal medical costs and open-enrollment spending.
Oscar's Q2 Profitability Resets 2026 Earnings View
Second-quarter earnings of $1.10 per share topped the Zacks Consensus Estimate of 43 cents. Revenues reached $4.9 billion, up 70.4% year over year, while adjusted EBITDA improved to $415.3 million from a $199.4 million loss a year earlier.
The Zacks Consensus Estimate for 2026 and 2027 EPS represents an increase of 208.3% and 21% respectively.
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Premium revenues climbed 70.8% to $4.8 billion, while medical expenses rose 48.6% to $3.8 billion. Oscar raised operating earnings guidance but left its revenue outlook unchanged, leaving the guidance change concentrated in profitability rather than the top line.
OSCR's MLR Improvement Shows Pricing Is Working
Oscar's first-half 2026 medical loss ratio improved to 75% from 83% a year earlier. Management attributed the change to disciplined pricing, stronger current-year performance, favorable utilization and prior-period reserve development.
Not all of the benefit came from current-period performance. Oscar recorded $164 million of favorable prior-period development in the second quarter, including about $160 million from final 2025 risk adjustment, so investors may distinguish recurring pricing gains from items that may not repeat.
Oscar's Tech Platform Is Driving Expense Leverage
Selling, general and administrative expenses rose 29.3% year over year to $691.1 million, but the second-quarter ratio fell to a company-low 14.2%. Oscar cited fixed-cost leverage and technology-driven efficiencies as membership expanded.
The claims platform delivered 98.7% first-pass accuracy and processed most claims in under 48 hours. Management expects artificial intelligence initiatives across benefits, billing, claims, clinical care and member support to generate material savings and support further scalability.
OSCR Faces a Tougher Back Half as Churn Rises
Oscar expects roughly 0.25 million-0.3 million members to be retroactively disenrolled under program-integrity actions. Back-half monthly churn is projected at 2%-4%, while the medical loss ratio is expected to rise sequentially and fourth-quarter administrative spending should increase with open enrollment.
Oscar's Ratings Reinforce the Improved Earnings Setup
The earnings setup is stronger, but the stock's rating picture is not uniformly favorable across styles. Oscar carries a Zacks Rank #1 (Strong Buy), alongside a VGM Score of A, Growth Score of A, Value Score of B and Momentum Score of C.
The Zacks Rank is designed around earnings-estimate revision trends over one to three months. The VGM Score blends value, growth and momentum characteristics, with A and B grades more favorable. OSCR's Growth Score of A and Value Score of B support the composite, while its Momentum Score of C is a comparatively less favorable reading.
Other Stocks to Consider
Elevance Health, Inc. ELV and UnitedHealth Group UNH are two other top-ranked stocks. Both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2026 earnings of Elevance Health moved north over the last 30 days, while that for UnitedHealth witnessed no movement in the same time frame.
In terms of share price movement, Elevance Health and UnitedHealth Group lost 1.1% and 11%, respectively, in the past three months.
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This article originally published on Zacks Investment Research (zacks.com).