Oscar Health Inc. faced a challenging day in the market following its release of a disappointing 2025 revenue forecast and a wider-than-expected loss for the fourth quarter of 2024. The company reported a quarterly loss of $0.62 per share, missing the consensus estimate of a $0.58 loss, marking a negative earnings surprise of 6.90%. Additionally, Oscar Health's revenue for the quarter was $2.39 billion, falling short of expectations by 2.79%. Despite a 67% year-over-year increase in fourth-quarter revenue to approximately $4 billion, the company's financial performance was overshadowed by concerns over its medical loss ratio and risk adjustment settlements, which have pressured profitability.
The company's outlook for 2025 has also raised concerns among investors. Oscar Health anticipates total revenue between $11.2 billion and $11.3 billion, which, while reflecting growth, may not have met market expectations. The company also expects its medical loss ratio to stabilize between 80.7% and 81.7%, and aims to reduce its SG&A expense ratio. However, the anticipated 9.1% impact of effectuation against actual paying members suggests potential enrollment declines, adding to investor apprehension. Despite these challenges, Oscar Health's management remains optimistic about future performance, supported by strategic leadership changes and a focus on operational expertise and market growth.
Oscar Health (OSCR) shares have dropped 11.39% to $13.54 as of 6:41 am on February 5th, down from its previous close of $15.28 on February 4th.