- Clover Health stockholders just can’t seem to catch a break lately
- However, there is no need to capitulate as the company has strong membership and revenue stats
- Investors should stay the course with CLOV stock despite the drawdown
Tennessee-headquartered Clover Health (NASDAQ:CLOV) is a next-generation Medicare Advantage insurer that is on a mission to improve every life. It is a noble mission, though this probably won’t provide much solace to downtrodden CLOV stock investors.
To put it simply, the company works with medical professionals and leverages the power of technology to make healthcare more accessible. The target market is primarily at-risk patients, including America’s aging population.
What really differentiates Clover Health is its Clover Assistant platform. It is a potential game changer — and life saver — in the industry, as the Clover Assistant provides physicians with data to drive improved clinical decision-making and outcomes.
This should be a high-conviction business, but Wall Street doesn’t seem convinced. So, is Clover Health worth your investment capital now?
|CLOV||Clover Health Investments||$3.50|
What’s Happening with CLOV Stock?
CLOV stock got caught up in the Reddit-fueled meme-stock hype of early 2021. After the pump came the dump, however, and now the share price is much closer to its 52-week low of around $2 than it is to the 52-week high of nearly $29.
Investors should understand that this is a mid-sized company with a market capitalization of around $1.6 billion. Holding CLOV stock involves a high degree of both risk and potential reward.
It is up to Clover Health to get more physicians on board with the Clover Assistant and to increase its membership. So far, however, the company appears to be gaining traction.
In particular, the company revealed Medicare Advantage membership growth of more than 25% on Jan. 10, 2022 compared to the beginning of 2021. Incredibly, Clover Health nearly tripled its membership in Georgia, while also demonstrating strong membership expansion in New Jersey, Pennsylvania and South Carolina.
Besides, the company started January 2022 “already above its previously indicated 2022 average [Medicare Advantage] membership guidance of 82,000 lives.” So, it is fair to say that Clover Health got off to a terrific start this year.
A Bright Outlook
Has the company’s membership growth translated to robust revenues, though? This is a valid question and thankfully, Clover Health has healthy results to share.
Astonishingly, during 2021’s fourth quarter (Q4), Clover Health’s lives under Clover Assistant management increased year-over-year by 223%. Slightly more than half of those lives under management were Medicare Advantage members.
Not only that, but the company’s Q4 2021 total revenue of $432 million represented a 160% year-over-year improvement.
For full-year 2022, Clover Health offered optimistic total revenue guidance, expecting to exceed $3 billion. Medicare Advantage membership is expected to contribute to the company’s success, with an anticipated 2022 average growth rate of 26% to 27% versus to the 2021 average.
What to do With CLOV Stock
Make no mistake: Clover Health might be a mid-sized business, but it is growing by leaps and bounds.
The company started off 2022 with powerful Medicare Advantage membership growth. Still, investors largely ignored CLOV stock.
This shouldn’t be a problem for contrarian investors who could consider a small position in the stock with a buy-and-hold strategy.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.