Clover Health Investments, Corp. (NASDAQ: CLOV) Expected to Grow 14% in 2021, While Expanding Potential Service Ground
Clover Health Investments, Corp. (NASDAQ: CLOV) is a volatile company, peaking at $ 22.15 per share in June 2021, then falling to $ 9.72 in the last trading session. That’s not to say this is a bad company, just that investors need to prepare for a potentially stressful race in the future.
That being said, it is always helpful to know a company’s money-making ability based on past fundamentals, as well as future estimates.
We’ll take a look at the latest results update, released for Q1 on May 17, 2021 and from there.
The results do not look very good, especially as statutory losses increased by 30% to US $ 0.13 per share. Revenue of US $ 200 million was 4.0% higher than expected, but it feels a bit like cold comfort. Clover also released a forecast of around $ 820 million for 2021. The next earnings call is scheduled for early August, and Clover will need to keep investor interest until then.
Interestingly, Clover has had some good news lately.
In a strategy update on June 24, 2020. Clover announced expansion into 101 new markets, which will make Clover’s Medicare Advantage (MA) plans available in 209 counties in 9 US states.
The map below shows which states will grant (partial) eligibility to Clover’s plans.
NASDAQ: CLOV Map of Clover Health Investments Partial Plan Availability – Pending Approval
On June 22, 2021, it was also included in 2 indices, which will increase its exposure to the market. The clues are:
- S&P Health Care Services Select Industry Index
- S&P Global BMI Index
This news gives an outlook for potential growth, but it makes sense to consider how analysts see the bigger picture of Clover’s future.
We have aggregated the latest statutory forecast to see how analysts estimate future earnings for Clover Health Investments after the latest earnings results. Keep in mind that these may lag behind the latest news and events, but should give investors a good baseline.
Check out our latest review for Clover Health Investments
Based on the latest results, the current consensus of dual analysts at Clover Health Investments projects revenue of US $ 819.2 million in 2021 and is almost fully on target. This implies a solid sales growth of 14%.
We stress that Clover Health Investments’ revenue growth is expected to slow, with the expected annualized growth rate of 19% through the end of 2021 being well below the historic growth of 42% over the past year.
Juxtapose that to other industry companies covered by analysts, which are expected to grow their revenues (in total) by 7.6% per year. It’s pretty reassuring to know that while Clover Health Investments’ revenue growth is expected to slow, it is still expected to grow faster than the industry itself.
We would also like to acknowledge the financial health of Clover. The company has a manageable level of debt of approximately US $ 44 million and many current assets, such as a cash balance of US $ 684 million, to maintain it for some time. Financial health is quite dependent on management’s approach, as it may overburden its expenses and seek additional funding.
You can find our financial health analysis on Clover here
The bottom line
Clover is a growing company that is expected to experience a fair amount of turmoil. It is a time of both risk and opportunity for business and investors.
The business is under a lot of upward and downward pressure, and can prove risky in the short term. The company is estimated to grow faster than the entire industry and has a lot of room for expansion, as the market for their main product is also expected to grow.
You always have to think about the risks. Concrete example, we have spotted 1 warning sign for Clover Health Investments you must be aware.
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Simply Wall St analyst Goran Damchevski and Simply Wall St have no positions in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material.
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