Hello everyone! Today i want to share some option strategies with you!
1.
Have been contemplating which healthcare stock to go heavier into ... $Oscar Health, Inc.(OSCR)$ or $Hims & Hers Health Inc.(HIMS)$ .
Looks like $Oscar Health, Inc.(OSCR)$ is the front-runner as a longer-term investment with more potential.
Comparison and reasons in the 🧵 below ...
Thanks ChatGPT and Grok for help with the analysis.
Why $Oscar Health, Inc.(OSCR)$ :
- Undervalued Disruptor: OSCR trades at a much lower valuation than HIMS, suggesting greater upside if it successfully executes.
- Bigger Market: Health insurance is a multi-trillion-dollar industry. Even a small market share gain is a big dollar impact.
- Tech-Driven Insurance: OSCR positions itself as a next-gen insurer using data science and member engagement, which could be a long-term edge.
- Turnaround Momentum: There are signs of improvement in loss ratios and operational efficiency, and some bulls see a path to breakeven soon.
- Insider ownership / institutional backing: SoftBank and other major players have backed Oscar. Institutional ownership continues to increase quarter-over-quarter.
Why $Hims & Hers Health Inc.(HIMS)$ :
- Proven Revenue Growth: HIMS is already growing >100% YoY. OSCR isn’t.
- Path to Profitability: HIMS is already FCF-positive and EBITDA-positive. OSCR is not.
- Diversified Offering: HIMS isn’t just telehealth — it’s becoming a health platform across sexual health, dermatology, weight loss, mental health.
- GLP-1 Boom: HIMS is monetizing the weight-loss trend now, while others are still watching.
- Consumer Brand Strength: HIMS has strong DTC marketing, brand equity, and stickiness.
1. Business Models and Market Positioning
OSCR's proprietary software and AI-driven backend streamline claims processing, risk scoring, and member engagement, aiming to disrupt the $4.5 trillion U.S. healthcare industry. This tech-powered underwriting is reducing costs vs incumbents. OSCR’s focus on individual coverage health reimbursement arrangements (ICHRAs) expands its total addressable market (TAM) from $160 billion to $720 billion by targeting 75 million potential customers.
$HIMS: operates a direct-to-consumer telehealth platform targeting younger demographics with a user-friendly digital platform, competing in specific segments rather than offering comprehensive medical services. HIMS provides prescription and over-the-counter products for mental health, sexual health, weight management, skincare, and hair care.
Comparison: OSCR’s broader scope in health insurance gives it access to a larger TAM, but its niche focus on ACA and small businesses limits its immediate market compared to traditional insurers. HIMS operates in a narrower but rapidly growing telemedicine market, benefiting from strong consumer demand for accessible healthcare. HIMS’s targeted approach may allow faster market penetration, while OSCR’s systemic disruption potential could yield significant long-term gains.
2. Market Opportunities
$Oscar Health, Inc.(OSCR)$ 's shift to ICHRAs improves its ability to scale by targeting small and medium-sized businesses, significantly expanding its TAM. Its AI-driven platform enhances efficiency, reducing costs and improving member experience, which could drive market share gains in states like Florida, Tennessee, and Texas.
The +Oscar platform and Campaign Builder engage providers and payers, diversifying revenue streams. Partnerships, such as with OpenAI, signal technological advancement.
Analysts project expected EPS growth of 510% for 2025, with revenue projected at $11.21 billion (22.12% increase). Analyst price targets range from $12 to $28, with mixed ratings. In addition, OSCR is showing improving loss ratios and margins, a big deal in insurance.
HIMS's focus on younger demographics aligns with increasing telemedicine adoption. Its entry into weight management taps into a high-demand market, though it faces competition from established pharmaceutical giants. HIMS’s platform simplifies access to care, driving customer acquisition. Its direct-to-consumer model supports rapid scaling, but its narrower focus limits diversification compared to OSCR.
Analysts projections for EPS and revenue forecasts for 2025 are not provided, but HIMS’s stock performance and 3.63 Sharpe Ratio indicate strong market confidence.
Comparison: OSCR’s larger TAM and diversified growth strategies (ICHRAs, AI, partnerships) suggest greater long-term potential, particularly if it captures market share from legacy insurers. HIMS benefits from a faster-growing telemedicine sector and strong brand appeal, but faces competition in its niche markets. OSCR’s projected EPS growth outpaces HIMS’s implied growth, based on available data.
3. Risks
OSCR:
- Regulatory Risk: Changes to ACA subsidies or regulations could pressure OSCR’s core business, as it heavily relies on ACA members.
- Competitive Landscape: Intense competition from legacy insurers like UnitedHealth Group and new entrants challenges market share.
- Enrollment Risks: Potential attrition if members gain employment or stop paying premiums could impact revenue.
HIMS:
- Competitive Risk: Faces competition from pharmaceutical giants in weight management and other telehealth providers in its focus areas.
- Limited Scope: HIMS’s narrower service offerings limit its ability to compete with comprehensive healthcare providers, potentially capping growth.
- Immediate Revenue Hit: No more discounted Wegovy via NovoCare ( $Novo-Nordisk A/S(NVO)$ ), so HIMS now relies on its own compounding or branded drugs.Analysts estimate up to 50% of HIMS’s projected $725 M in 2025 weight‑loss revenue was tied to compounded GLP‑1s that are now under pressure.
Comparison: OSCR’s regulatory exposure is a significant risk, given its ACA focus, but its diversification efforts mitigate this. HIMS’s competitive pressures are more immediate due to its niche markets, and its higher volatility and revenue hit suggests greater short-term risk. OSCR’s stronger balance sheet provides a more stable growth foundation.
The Takeaway:
If you’re betting on who’s executing growth right now and is more established in terms of scale, execution, and profitability — it’s $HIMS.
If your investment thesis is based on “who has the cleaner, more sustainable path to long-term disruption, market share capture, and revenue growth” then OSCR edges ahead. You are betting on a deeper-value, long-term disruption play, but it comes with more current risk and longer timelines.
Keep in mind that there is a place for both stocks in one's portfolio. That said, OSCR takes the lead as a company with bigger growth (i.e. stock price) potential in the long-term if it executes successfully.
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