Clover Health (CLOV, Financial) announced its first-quarter revenue at $462.33 million, which fell short of the anticipated $466.93 million. Despite this, the company's leadership expressed satisfaction with their progress, noting significant membership growth and increased profitability. The CEO emphasized that CLOV's unique operational model is designed to support scalable expansion while managing medical expenses effectively, even in the face of regulatory shifts. This approach is proving advantageous compared to competitors, aided by the Clover Assistant tool. A recent clinical study highlighted that patients engaged with Clover Assistant providers experienced fewer hospitalizations and readmissions related to Congestive Heart Failure.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Clover Health Investments Corp (CLOV, Financial) is $4.15 with a high estimate of $6.00 and a low estimate of $1.75. The average target implies an upside of 23.88% from the current price of $3.35. More detailed estimate data can be found on the Clover Health Investments Corp (CLOV) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Clover Health Investments Corp's (CLOV, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Clover Health Investments Corp (CLOV, Financial) in one year is $2.18, suggesting a downside of 34.93% from the current price of $3.35. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Clover Health Investments Corp (CLOV) Summary page.
CLOV Key Business Developments
Release Date: February 27, 2025
- Revenue: $331 million for Q4 2024; $1.345 billion for full year 2024, a 9% growth year-over-year.
- Adjusted EBITDA: $8 million profit in Q4 2024; over $70 million for full year 2024, improved by $112 million compared to 2023.
- Insurance Benefit Expense Ratio (BER): 82.8% in Q4 2024, improved from 87.4% in Q4 2023; 81.2% for full year 2024.
- Medical Cost Ratio (MCR): 73.5% in Q4 2024, improved from 82.4% in Q4 2023; 75.1% for full year 2024.
- SG&A Expenses: $150 million in Q4 2024, a 7% increase year-over-year; $295 million for full year 2024, a 1% decrease year-over-year.
- Net Loss: Improved by $46 million to a loss of $21 million in Q4 2024 compared to Q4 2023.
- Cash Position: $438 million in restricted and unrestricted cash, cash equivalents, and investments at the end of Q4 2024.
- Medicare Advantage Membership: Surpassed 100,000 members in 2024, with a 27% year-over-year growth.
- 2025 Revenue Guidance: Expected between $1.800 billion and $1.875 billion, reflecting 37% growth at the midpoint.
- 2025 Adjusted EBITDA Guidance: Expected between $45 million and $70 million.
- 2025 Adjusted SG&A Guidance: Expected between $355 million and $365 million, representing a 200 basis point improvement year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Clover Health Investments Corp (CLOV, Financial) achieved meaningful full-year adjusted EBITDA profitability in 2024, positioning the company for future growth.
- The company surpassed 100,000 Medicare Advantage members with a 27% year-over-year growth and a 95% AEP retention rate, indicating strong member satisfaction.
- Clover Health Investments Corp (CLOV) improved its star ratings, with over 95% of members in 4-star rated PPO plans, which will positively impact financials in 2026.
- The successful launch of Counterpart Health, including the Clover Assistant for third-party partnerships, demonstrates the company's commitment to technology-driven care management.
- The company reported strong revenue growth, with insurance revenue increasing by 9% year-over-year, and significant improvements in insurance benefit expense ratio and medical cost ratio.
Negative Points
- The company experienced higher SG&A expenses in the fourth quarter due to strategic investments, which may impact short-term profitability.
- New membership growth is expected to reduce year-over-year adjusted EBITDA and adjusted net income due to higher loss ratios for first-year members.
- The favorable prior period development (PPD) that positively impacted 2024 results is not expected to recur, potentially affecting future financial performance.
- Clover Health Investments Corp (CLOV) faces broader industry headwinds that could impact profitability despite improvements in existing member cohort economics.
- The company is still in the early stages of its Counterpart Health initiative, with no immediate impact on revenue metrics, which may delay financial benefits.
