On Friday, Raymond James initiated coverage on Oscar Health Inc (NYSE:OSCR) with an Outperform rating and established a price target of $20.00. The firm highlighted the company's tech-driven and customer-focused approach in the health insurance sector, emphasizing its specialty in the individual and small group markets. Oscar Health, which operates primarily through the Health Insurance Exchange, has garnered over 1.3 million members across 18 states.
The analyst noted that Oscar Health differentiates itself by leveraging its proprietary +Oscar technology platform, which it also provides to other payors and providers. This technology-first strategy has been instrumental in Oscar Health's ability to engage consumers effectively, guiding them towards efficient utilization of services and helping to reduce medical costs.
Since 2021, Oscar Health has demonstrated significant growth, expanding its membership at a compound annual growth rate (CAGR) of approximately 35%. In conjunction with this growth, the company has successfully reduced its medical loss ratio (MLR) by over 700 basis points, indicating a more efficient operation in terms of medical cost management relative to premiums collected.
The company's success in consumer engagement is further evidenced by its mobile app performance. According to the analyst, Oscar Health's app download rate is nine times higher than the average insurer, which suggests a strong consumer connection and higher member satisfaction levels compared to its competitors.
The Outperform rating and $20.00 price target reflect Raymond James' positive view of Oscar Health's market position and future prospects within the health insurance industry, underpinned by its innovative use of technology and consumer engagement strategies.
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