Here’s why the Oscar Health stock price is in a bull run

Oscar Health stock price has been in a strong uptrend in the past few weeks as the company shared plans on integrating artificial intelligence (AI) into its business. OSCR surged to a high of $24.2, its highest level since June 2021. It has jumped by over 100% from its lowest level this year.

Why Oscar Health stock price has soared

Oscar Health is a company that provides health plans through the Patient Protection and Affordable Care Act, commonly known as Obamacare. It was started by Joshua Kushner.

It has its insurance business and the +Oscar platform, which deploys its technology to power others throughout the healthcare system. It has over 500,000 clients, while its main insurance solution has over a million of customers.

The main reason why the Oscar Health stock price has jumped lately is that the company recently raised $355 million through convertible senior subordinated notes offerings. It plans to use these funds to invest in artificial intelligence (AI) initiatives and other strategies, including general corporate purposes and lowering the cost of care.

The AI theme has been the most prominent today, a trend that may continue in the coming months. For example, most AI stocks surged on Monday after a major deal between AMD and OpenAI.

The stock also jumped after media reports suggested that Donald Trump was now open to talk with Democrats to address their concerns about the healthcare sector, where Oscar is a major player.

Business is growing

Oscar Health stock price has also jumped because its recent results showed that the company's business was growing although challenges remain.

The results showed that the company's revenue rose from $2.219 billion in the second quarter of 2024 to $2.86 billion. 

However, while the revenue growth was good, the company also faced major challenges as the medical loss ratio jumped to 91.1% and the net loss soared to $228 million. Its adjusted EBITDA rose to over $199 million.

The management blamed the surge in the loss ratio to an increase in average market morbidity, meaning the increase in the average level of illnesses, chronic conditions, and healthcare utilization.

Wall Street analysts are optimistic that the company will continue to do well in terms of topline growth. The average estimate is that Oscar Health’s revenue in the last quarter will be $3.09 billion, up from 27% from the same period last year. 

Analysts expect the revenue to rise by 27% in Q4 to $3.06 billion, bringing the annual figure to over $12 billion. Oscar is also expected to make a net loss of $1.38 per share this year, a big reversal from the profit it made last year.

Oscar Health stock price technical analysis 

The daily timeframe chart shows that the Oscar stock price has rebounded from a low of $11.22 in April to $24.2 today. It has jumped above the important resistance level at $22.76, the highest point in June.

The stock remains much higher than the 50-day and 100-day Exponential Moving Averages (EMA), which is a bullish sign.

Therefore, the most likely scenario is where the stock continues to rise, with the next key resistance level to watch being at $25. A drop below the support at $20 will invalidate the bullish outlook.