Yahoo Finance Shareholders in Oscar Health (NYSE:OSCR) are in the red if they invested a year ago
Even the best investor on earth makes unsuccessful investments. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. We wouldn't blame Oscar Health, Inc. (NYSE:OSCR) shareholders if they were still in shock after the stock dropped like a lead balloon, down 73% in just one year. That'd be a striking reminder about the importance of diversification. We wouldn't rush to judgement on Oscar Health because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 56% in the last 90 days.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
View our latest analysis for Oscar Health
Oscar Health isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Oscar Health grew its revenue by 144% over the last year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 73% over twelve months. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. What is clear is that the market is not judging the company on its revenue growth right now. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Oscar Health stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We doubt Oscar Health shareholders are happy with the loss of 73% over twelve months. That falls short of the market, which lost 21%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 56% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Oscar Health you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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