Clover Health (NASDAQ:CLOV) stock is up 15% today after the healthcare insurance company reported first-quarter results.
Clover Health reported first-quarter revenue of $874.4 million, which beat the $787.34 million analyst estimate. In terms of earnings, the company reported a net loss of $75.3 million. The number of health insurance accounts managed by Clover Health reached approximately 257,000 during Q1, up 550% from 66,000 a year earlier.
The revenue beat and increase in accounts under management is enough to send CLOV stock sharply higher today. Prior to today, CLOV stock had fallen 40% year to date to trade at $2.41, putting it in penny stock territory.
What Happened With CLOV Stock
In addition to its earnings, Clover Health reaffirmed its full-year guidance for 2022, saying it expects to earn revenue of $3 billion to $3.4 billion versus the $3.24 billion analyst estimate.
“We are cautiously optimistic about the remainder of 2022, and are maintaining our expectations for a meaningful improvement over last year,” said interim CFO Mark Herbers in a news release.
Clover Health’s insurance membership is forecast to average between 84,000 and 85,000 this year, a growth rate of 26%-27% compared to 2021.
Why It Matters
The latest earnings from Clover Health are extremely positive and are renewing confidence in the company and its ability to execute on a growth strategy. Before today’s move higher, CLOV stock had fallen 92% from its 52-week high of $28.85 a share.
Clover Health has been treated as a meme stock over the past year, with retail investors executing a squeeze on the heavily shorted stock. The latest earnings results help the company move further away from its meme stock image and inspire some confidence that the health insurer is legitimate and its share price is currently undervalued.
What’s Next for Clover Health
CLOV stock gets a nice bump today after its better-than-expected earnings results and positive forward guidance. However, investors should keep in mind that Clover Health’s share price still has a long way to go to meaningfully recover and get above the $5 penny stock threshold. Until then, expect trading in Clover Health to remain volatile.
On the date of publication, Joel Baglole 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.