The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how health insurance providers stocks fared in Q1, starting with Oscar Health NYSE:OSCR.
Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.
The 12 health insurance providers stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.
Luckily, health insurance providers stocks have performed well with share prices up 38.3% on average since the latest earnings results.
Oscar Health NYSE:OSCR
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health NYSE:OSCR is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Oscar Health reported revenues of $4.65 billion, up 52.6% year on year. This print fell short of analysts’ expectations by 5.7%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.
Oscar Health delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 67.8% since reporting and currently trades at $30.10.
Best Q1: CVS Health NYSE:CVS
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health NYSE:CVS operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
CVS Health reported revenues of $100.4 billion, up 6.2% year on year, outperforming analysts’ expectations by 6.3%. The business had an exceptional quarter with an impressive beat of analysts’ full-year EPS guidance estimates.
CVS Health scored the biggest analyst estimate beat among its peers. The market seems happy with the results as the stock is up 29.1% since reporting. It currently trades at $104.20.
Weakest Q1: Cencora NYSE:COR
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora NYSE:COR is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Cencora reported revenues of $78.36 billion, up 3.8% year on year, falling short of analysts’ expectations by 3.9%. It was a slower quarter, leaving some shareholders looking for more.
As expected, the stock is down 6.5% since the results and currently trades at $286.13.
Alignment Healthcare NASDAQ:ALHC
Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare NASDAQ:ALHC provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.
Alignment Healthcare reported revenues of $1.24 billion, up 33.3% year on year. This number topped analysts’ expectations by 1.3%. Taking a step back, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations.
Alignment Healthcare had the weakest guidance update among its peers. The company added 48,500 customers to reach a total of 284,800. The stock is up 3.4% since reporting and currently trades at $23.30.
UnitedHealth NYSE:UNH
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group NYSE:UNH operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
UnitedHealth reported revenues of $111.7 billion, up 2% year on year. This result beat analysts’ expectations by 1.7%. It was a strong quarter as it also produced an impressive beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.
The stock is up 32.1% since reporting and currently trades at $427.40.