Yahoo Finance Analysts Have Been Trimming Their Clover Health Investments, Corp. (NASDAQ:CLOV) Price Target After Its Latest Report
Clover Health Investments, Corp. (NASDAQ:CLOV) just released its first-quarter report and things are looking bullish. Results overall were solid, with revenues arriving 8.0% better than analyst forecasts at US$347m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.039 per share, were 8.0% smaller than the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Clover Health Investments
After the latest results, the consensus from Clover Health Investments' three analysts is for revenues of US$1.34b in 2024, which would reflect a disturbing 35% decline in revenue compared to the last year of performance. Losses are predicted to fall substantially, shrinking 37% to US$0.20. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.28b and losses of US$0.22 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.
The consensus price target fell 11%, to US$1.33, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Clover Health Investments at US$2.00 per share, while the most bearish prices it at US$1.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 44% by the end of 2024. This indicates a significant reduction from annual growth of 27% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Clover Health Investments is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Clover Health Investments going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Clover Health Investments you should be aware of.
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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.
