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$488M$463M

IPO Oscar Health

Health insurance company
IPO
Medium risk

Revenues in 2019-2020

Invest in IPO Oscar Health

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Investment Idea Details
The Company

Oscar Health is a health insurance company that employs technology, design, and data to humanize health care. It offers individual health insurance plans to individuals, families and small businesses, both directly and through health insurance marketplaces. The plans cover doctor visits, generic drugs, routine care services, including flu shots, immunizations, pregnancy screenings, lab tests and more, discounted rates for specialist visits, brand-name drugs, urgent care, and other common care, as well as pregnancy, surgery or recurring illness coverage.

Oscar Health has experienced significant member growth while keeping insurance premiums affordable for the members. As of January 31, 2021, it had 529,000 members, up from 82,000 as of January 31, 2017, representing a compound annual growth rate, or CAGR, of 59%. The company was founded in 2013 in New York.

Market Opportunity

The U.S. healthcare system is the world’s largest and most expensive — estimated to have cost over $4 trillion in 2020 — yet health outcomes are worse than in other advanced economies. Costs are so out of control that medical bills contribute to around 66% of all personal bankruptcies in the United States.

The U.S. healthcare industry is a massive and growing market in the middle of a paradigm shift that creates substantial opportunities for private sector innovation. Public and private health insurance companies today represent over $1 trillion of enterprise value in the United States alone. Oscar Health currently sells health plans in three markets — Individual, Small Group, and Medicare Advantage—which, in aggregate, serve more than an estimated 50 million Americans and represent an estimated $450 billion in direct policy premiums.

Risks

Oscar Health is highly unprofitable, and may not achieve or maintain profitability in the future. The company has accumulated $1.4B in losses since the company started in 2013, or $106 per member per month. Oscar Health is seeing slow economies of scale. InsuranceCo Combined Ratio was 113.1% in 2019 and 110.8% in 2020, it is still above the 100% mark that would indicate a break-even insurance business.

Oscar Health issued a $150 million four-year-term loan in October 2020, secured by the company’s assets at a high interest rate of 12.75% per year. The company needs to pursue the public offering to obtain additional capital and cover part of this debt, which is a negative sign to new investors.

Oscar Health business activities are subject to ongoing, complex, and evolving regulatory obligations, and to continued regulatory review, which result in significant additional expense. If it fails to comply with regulatory requirements, or is unable to meet performance standards applicable to the business, its operations could be disrupted or it may become subject to significant penalties.

Financials

Oscar Health has raised a total of $1.6B in funding over 10 rounds from 28 institutional investors, including Google, Khosla Ventures, Goldman Sachs, Founders Fund, Tiger Global and others. It had a valuation of $3.2 billion in a 2018 funding round.

The company booked $550M in revenue for the last 12 months. Gross margin is around 51%. The revenue grew The company booked $463M in revenue for the last 12 months. The company generates a substantial majority of total revenue from premiums it receives from serving members. The total revenue declined by 5% YoY in 2020 due to COVID-19 negative temporary impact on the healthcare sector.

The company plans to sell 31 million shares at a price range of $32 to $34. The company intends to raise as much as $1B in an IPO of the common stock at about $8B valuation. Similar public company is Clover Health (CLOV), which recently became public through SPAC. Clover Health has 57K members and is currently trading at 8x LTM total revenue with revenue growth of 45% in 2020. It has a market capitalization of $5B. The expected return on investment is medium, up to 40%.

How IPO Investments Work
1. Collection of funds

2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.

Publication
09 Feb
Threshold amount
$50
2. Buy shares

We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».

Submit applications before
1 Mar
3. Start Bidding

The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.

Start Bidding
3 Mar
Return forecast
Medium (up to 40%)
4. Receiving profit

After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.

End
7 Jun
Early profit fixation

Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.

From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.

The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.

Fee

FOR ENTRY

3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.

FOR EXIT

1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.

SUCCESS

20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.

TO EARLY EXIT

Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.

Advantages Enjoyed by Those Investing with United Traders

RELIABILITY

Our risk managers ensure proper support throughout the entire transaction.

IN THE PROFIT FROM THE FIRST DAY

Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.

LOW ENTRY THRESHOLD

Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.

Invest in IPO Oscar Health

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