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Oscar Health, Inc. (OSCR) Hit a 52 Week High, Can the Run Continue?

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Have you been paying attention to shares of Oscar Health, Inc. (OSCR - Free Report) ? Shares have been on the move with the stock up 46.8% over the past month. The stock hit a new 52-week high of $22.68 in the previous session. Oscar Health, Inc. has gained 136.5% since the start of the year compared to the 3.7% move for the Zacks Finance sector and the 13% return for the Zacks Insurance - Multi line industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 7, 2024, Oscar Health reported EPS of $0.62 versus consensus estimate of $0.28.

For the current fiscal year, Oscar Health is expected to post earnings of -$0.04 per share on $8.38 billion in revenues. This represents a 96.72% change in EPS on a 42.92% change in revenues. For the next fiscal year, the company is expected to earn $0.56 per share on $9.85 billion in revenues. This represents a year-over-year change of 1475% and 17.59%, respectively.

Valuation Metrics

Oscar Health may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Oscar Health has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Oscar Health currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Oscar Health passes the test. Thus, it seems as though Oscar Health shares could have a bit more room to run in the near term.

How Does OSCR Stack Up to the Competition?

Shares of OSCR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Hamilton Insurance Group, Ltd. (HG - Free Report) . HG has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of B.

Earnings were strong last quarter. Hamilton Insurance Group, Ltd. beat our consensus estimate by 27.78%, and for the current fiscal year, HG is expected to post earnings of $3.43 per share on revenue of $2.22 billion.

Shares of Hamilton Insurance Group, Ltd. have gained 23.4% over the past month, and currently trade at a forward P/E of 4.67X and a P/CF of 7.7X.

The Insurance - Multi line industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for OSCR and HG, even beyond their own solid fundamental situation.


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