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In the last reported quarter, the company delivered earnings per share of a penny against the Zacks Consensus Estimate of a loss of 4 cents. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on each of the four occasions, delivering an earnings surprise of 49.2%, on average.
For third-quarter 2024, the Zacks Consensus Estimate for revenues is pegged at $347.6 million, implying a decline of 27.9% from the prior-year quarter’s reported figure. The consensus estimate for loss per share is pegged at 3 cents compared with the prior-year period’s loss of 9 cents per share.
CLOV Estimate Movement
Earnings estimates for Clover Health’s 2024 earnings have remained flat at a loss of 13 cents in the past 60 days.
Image Source: Zacks Investment Research
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Let’s check out the factors that have shaped CLOV’s performance prior to this announcement.
Factors to Note Before Clover Health Reports
On the second-quarter earnings call in August, management stated that the company continued to witness strength in its Insurance BER (benefits expense ratio) and MCR (medical care ratios). On a year-to-date basis also, both BER and MCR demonstrated strong performance. Per management, the company benefited from the continued maturation of its core Medicare Advantage (MA) plan operations during both periods this year. This momentum is likely to have sustained in the third quarter, thereby raising our optimism about the stock’s performance.
On the second-quarter earnings call, management also stated that the company’s strong financial results were driven by meaningful profitability from CLOV’s core Insurance plan operations. This looks promising for the company’s third-quarter performance.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: Clover Health has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Shares Outperform Industry, Underperforms Sector and S&P
Year to date, shares of Clover Health have gained 340.1%. The stock has outperformed the Medical Info Systems’ 17.8% decline. CLOV shares also outperformed the Zacks Medical sector’s increase of 2.7% and the S&P 500’s rise of 20.5%.
YTD Price Comparison
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Clover Health’s forward 12-month price-to-sales (P/S) is 1.4X, a discount to the industry's average of 3.2X. The company is also trading at a significant discount to other industry players like Omnicell, Inc. (OMCL - Free Report) , with its current P/S being 1.9X, Axonics, Inc. , whose current P/S is 6.8X, and Phreesia, Inc. (PHR - Free Report) , whose current P/S is 2.3X. This suggests that investors may be paying a lower price relative to the company's expected sales growth.
Image Source: Zacks Investment Research
Long-Term Investment Visibility
Clover Health is likely to continue its strong performance in the rest of 2024 on the back of continued strength in its Insurance offerings. On the second-quarter earnings call, management stated that with the company’s continued investment in Assistant platform development, it expects to continue its momentum in the overall MA business. CLOV is also streamlining clinician workflows around care gap closure to help them quickly and easily leverage the Assistant’s access to robust data sources beyond what is available in their electronic health records.
In September, Clover Health’s subsidiary, Counterpart Health, Inc., announced a multi-year agreement with The Iowa Clinic, P.C. The deal is expected to position The Iowa Clinic as one of Counterpart's anchor customers in the Midwest, as Counterpart drives a broader strategic expansion across the country. This looks promising for CLOV’s long-term prospects.
Our Final Take
There is no denying that Clover Health sits favorably in terms of core business strength, earnings prowess and robust financial footing. The stock’s strong core growth prospects are a good reason for existing investors to retain shares for potential future gains.
For those exploring to make new additions to their portfolios, the valuation indicates superior performance expectations compared with its industry and sector peers. It is still valued lower than the broader market, which suggests potential room for growth if it can align more closely with overall market performance. As the chances of beating estimates are unlikely, it would be unwise to add the stock to one’s portfolio before the earnings release. However, if investors are already holding the stock, it would be prudent to hold on to it at present. The favorable Zacks Style Score of A suggests continued uptrend potential for CLOV.
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CLOV Q3 Estimates Unchanged Before Earnings: How to Play the Stock?
Clover Health Investments, Corp. (CLOV - Free Report) is scheduled to report third-quarter 2024 results on Nov. 6, after the closing bell.
In the last reported quarter, the company delivered earnings per share of a penny against the Zacks Consensus Estimate of a loss of 4 cents. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on each of the four occasions, delivering an earnings surprise of 49.2%, on average.
For third-quarter 2024, the Zacks Consensus Estimate for revenues is pegged at $347.6 million, implying a decline of 27.9% from the prior-year quarter’s reported figure. The consensus estimate for loss per share is pegged at 3 cents compared with the prior-year period’s loss of 9 cents per share.
CLOV Estimate Movement
Earnings estimates for Clover Health’s 2024 earnings have remained flat at a loss of 13 cents in the past 60 days.
Image Source: Zacks Investment Research
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Let’s check out the factors that have shaped CLOV’s performance prior to this announcement.
Factors to Note Before Clover Health Reports
On the second-quarter earnings call in August, management stated that the company continued to witness strength in its Insurance BER (benefits expense ratio) and MCR (medical care ratios). On a year-to-date basis also, both BER and MCR demonstrated strong performance. Per management, the company benefited from the continued maturation of its core Medicare Advantage (MA) plan operations during both periods this year. This momentum is likely to have sustained in the third quarter, thereby raising our optimism about the stock’s performance.
On the second-quarter earnings call, management also stated that the company’s strong financial results were driven by meaningful profitability from CLOV’s core Insurance plan operations. This looks promising for the company’s third-quarter performance.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: Clover Health has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares Outperform Industry, Underperforms Sector and S&P
Year to date, shares of Clover Health have gained 340.1%. The stock has outperformed the Medical Info Systems’ 17.8% decline. CLOV shares also outperformed the Zacks Medical sector’s increase of 2.7% and the S&P 500’s rise of 20.5%.
YTD Price Comparison
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Clover Health’s forward 12-month price-to-sales (P/S) is 1.4X, a discount to the industry's average of 3.2X. The company is also trading at a significant discount to other industry players like Omnicell, Inc. (OMCL - Free Report) , with its current P/S being 1.9X, Axonics, Inc. , whose current P/S is 6.8X, and Phreesia, Inc. (PHR - Free Report) , whose current P/S is 2.3X. This suggests that investors may be paying a lower price relative to the company's expected sales growth.
Image Source: Zacks Investment Research
Long-Term Investment Visibility
Clover Health is likely to continue its strong performance in the rest of 2024 on the back of continued strength in its Insurance offerings. On the second-quarter earnings call, management stated that with the company’s continued investment in Assistant platform development, it expects to continue its momentum in the overall MA business. CLOV is also streamlining clinician workflows around care gap closure to help them quickly and easily leverage the Assistant’s access to robust data sources beyond what is available in their electronic health records.
In September, Clover Health’s subsidiary, Counterpart Health, Inc., announced a multi-year agreement with The Iowa Clinic, P.C. The deal is expected to position The Iowa Clinic as one of Counterpart's anchor customers in the Midwest, as Counterpart drives a broader strategic expansion across the country. This looks promising for CLOV’s long-term prospects.
Our Final Take
There is no denying that Clover Health sits favorably in terms of core business strength, earnings prowess and robust financial footing. The stock’s strong core growth prospects are a good reason for existing investors to retain shares for potential future gains.
For those exploring to make new additions to their portfolios, the valuation indicates superior performance expectations compared with its industry and sector peers. It is still valued lower than the broader market, which suggests potential room for growth if it can align more closely with overall market performance. As the chances of beating estimates are unlikely, it would be unwise to add the stock to one’s portfolio before the earnings release. However, if investors are already holding the stock, it would be prudent to hold on to it at present. The favorable Zacks Style Score of A suggests continued uptrend potential for CLOV.