The U.S. health insurance industry continues to evolve rapidly, with tech-driven disruptors challenging traditional incumbents. In this context, the financial comparison between Oscar Health and Centene Corporation (CNC) for the first quarter of 2025 sheds light on two very different strategic playbooks. While both companies operate within the healthcare space, their growth trajectories, capital structures, and investor positioning diverge sharply.

Revenue Growth: Oscar Outpaces in Momentum, Centene Holds Steady

Oscar has maintained a robust revenue growth rate since 2022, albeit on a declining trend. Its 2022 surge of approximately 100% marked its aggressive entry into the market. In contrast, Centene has delivered single-digit growth consistently, reflecting a mature, low-volatility business model. For growth-oriented investors, Oscar’s trajectory remains compelling – at least in the short term.

Share Dilution: Oscar’s Expansion Comes at a Cost

Oscar has significantly diluted its shares over the past three years, issuing over 20% more stock in 2022 and continuing with high levels of dilution into 2024. On the other hand, Centene has actually reduced its share count in recent quarters. For long-term investors, this distinction is critical – dilution erodes shareholder value, even when top-line numbers are improving.

Free Cash Flow: Oscar Still in the Red, Centene Approaching Breakeven

Free cash flow (FCF) is a decisive metric for sustainability. Oscar continues to report negative FCF, though recent figures show marginal improvement. Centene, by comparison, is approaching breakeven territory, suggesting better financial discipline and operational efficiency. In a rising rate environment, consistent FCF is a key differentiator for institutional interest.

Stock Performance: Volatility Weighs on Oscar, Stability Supports Centene

Since their respective listings, Oscar’s stock has declined by approximately 36%, while Centene has limited its losses to around 13%. Oscar’s volatility reflects market skepticism toward its scalability and cost structure. Centene’s more stable chart indicates investor confidence in its risk management and predictability.

Valuation Multiples: Premium Expectations for Oscar

Oscar currently trades at a 2.3x price-to-gross-profit multiple, significantly higher than Centene’s 1.2x. This suggests the market is pricing in substantial growth and margin expansion potential for Oscar, despite current financial drawbacks. Whether this premium is justified depends largely on the company’s ability to translate innovation into profitability.

Balance Sheet Health: Centene Carries More Leverage

Centene’s debt-to-equity ratio has remained substantially higher over the past few years compared to Oscar. While debt is not inherently negative, elevated leverage may limit flexibility in downturns or amid regulatory shocks. Oscar’s leaner balance sheet may offer it more agility, although it also signals its reliance on equity financing.

Margins: Oscar Has the Gross Advantage, But Not in FCF

Oscar posts notably stronger gross margins than Centene, underscoring its potential for high profitability. However, when it comes to free cash flow margins, the gap is far narrower. This suggests Oscar’s high costs in customer acquisition and technology are still weighing heavily on its ability to generate cash from operations.

Return on Equity: Centene Rebounds, Oscar Still Underperforms

Oscar continues to report negative return on equity (ROE), though the trend is improving. Centene, meanwhile, has turned its ROE positive in recent years, now surpassing 10%. For investors focused on capital efficiency, Centene offers a clearer track record of value generation from shareholder capital.

Conclusion: Innovation vs. Stability – Which Investment Narrative Wins?

The Oscar-Centene comparison highlights a classic dichotomy in modern investing: disruptive growth versus steady execution. Oscar’s tech-first model and rapid top-line expansion are balanced by financial volatility, heavy dilution, and weak free cash flow. Centene’s model, while more traditional and less glamorous, offers steadier returns, lower risk, and a clearer path to long-term value creation.

Investors seeking predictability and near-term performance may lean toward Centene, while those betting on innovation and long-term transformation in healthcare delivery may find Oscar’s high-risk profile more attractive.