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Alphabet Plans to Splurge $375M on Health Insurance Startup

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Alphabet (GOOGL - Free Report) plans to invest $375 million in the health insurance startup, Oscar Health, in a bid to strengthen its presence in the healthcare sector.

The investment plan comes about months after Oscar Health raised $165 million in a funding round. Among the participants of the funding were Alphabet’s venture firm Capital G and life sciences division Verily, taking Oscar’s valuation to $3.2 billion.

Reportedly, Alphabet now roughly owns 10% share in the privately-held Oscar.

Founded in 2012, Oscar Health is an online health insurer company. Its website has an online search function that leads patients toward doctors per the symptoms they type using natural language. The insurance company aims to make health insurance pricing clearer for patients, while giving doctors more flexible payment models.

We believe the latest move will expand Alphabet’s share in the healthcare market, which will aid in reinforcing its market position.

Coming to price performance, Alphabet’s shares have returned 30.6% in the past 12 months, outperforming the industry’s growth of 4.2%.

 

Increasing Focus on Healthcare Sector

Alphabet is trying to strengthen its presence in the ever-expanding field of health care. Alphabet’s recent healthcare business plans are in sync with its growing focus on the healthcare market, supported by robust analytics techniques and tools.

Per the latest report from Research and Markets, the global healthcare analytics market is anticipated to reach $33.8 billion by 2023, at a CAGR of 25.5% between 2018 and 2023.

According to the report from Research and Markets, the sleep apnea market is anticipated to reach $6.5 billion by 2023 at a CAGR of 7.8% between 2018 and 2023.

We believe the company is well poised to benefit from growth in this sector.

Alphabet Inc. Price and Consensus

 

Alphabet Inc. Price and Consensus | Alphabet Inc. Quote

Zacks Rank and Stocks to Consider

Currently, Alphabet carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are Expedia Group, Inc. (EXPE - Free Report) , Infineon Technologies AG (IFNNY - Free Report) and Rambus Inc. (RMBS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Expedia, Infineon Technologies and Rambus is currently projected to be 16.1%, 7.5% and 10%, respectively.

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