There's been a notable change in appetite for Clover Health Investments, Corp. (NASDAQ:CLOV) shares in the week since its third-quarter report, with the stock down 11% to US$3.67. Results look to have been somewhat negative - revenue fell 4.4% short of analyst estimates at US$331m, although statutory losses were somewhat better. The per-share loss was US$0.019, 54% smaller than the analysts were expecting prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the consensus from Clover Health Investments' three analysts is for revenues of US$1.61b in 2025, which would reflect a stressful 24% decline in revenue compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 29% to US$0.14. Before this earnings announcement, the analysts had been modelling revenues of US$1.51b and losses of US$0.15 per share in 2025. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for next year.
It will come as no surprise to learn thatthe analysts have increased their price target for Clover Health Investments 27% to US$3.90on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Clover Health Investments, with the most bullish analyst valuing it at US$4.50 and the most bearish at US$3.20 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 19% annualised decline to the end of 2025. That is a notable change from historical growth of 29% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.6% per year. It's pretty clear that Clover Health Investments' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Clover Health Investments analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Clover Health Investments (1 is potentially serious!) that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
