The Medicare Advantage insurer, Clover Health (NASDAQ:CLOV), is going through a strange period. A month back, CLOV stock was trading at $2.62 a share and most recently closed at $3.14. Your gains would have been huge if you had purchased the stock a month back. However, if you had bought the stock six months back at $8, you would be sitting on huge losses. The recent jump in price is due to macro events and CLOV stock does not look like a decent buy.
The meme mania took the stock as high as $28.85 last year in June and it has been falling since then. CLOV stock is down more than 80% from the highs. Although the revenue has improved, investors are worried about the profitability of the business.
SVB Leerink has a price target of $2.50 for the stock with a market perform rating. Canaccord Genuity Group started coverage for the stock in February with a buy rating and a target of $6. Further, out of five analysts on TipRanks, there is one buy and one sell rating for the stock, while three have a hold rating with a target price of $4.10, a 30% upside from the current level.
There is little news about the company after it delivered quarterly earnings in February, but it did provide an uplifting guideline. The company is set to release the next earnings report next month and this is when we will get an insight into the fundamentals. My InvestorPlace colleague Muslim Farooque believes that despite the risks, CLOV stock has upside potential.
The company has expansion plans for this year and the numbers for the coming quarter could improve the bottom line. For investors looking for a great penny stock, now is not the time to make the move. Wait for the results before you put your money on CLOV stock. The risk is high and a lot is at stake.
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On the date of publication, Vandita Jadeja 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.