Clover Health Investments, Corp. (NASDAQ:CLOV) Just Reported Third-Quarter Earnings And Analysts Are Lifting Their Estimates

It's been a mediocre week for Clover Health Investments, Corp. (NASDAQ:CLOV) shareholders, with the stock dropping 11% to US$3.67 in the week since its latest quarterly results. Revenues of US$331m came in a modest 4.4% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.019 coming in a substantial 54% smaller than what the analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Clover Health Investments

Taking into account the latest results, the current consensus, from the three analysts covering Clover Health Investments, is for revenues of US$1.61b in 2025. This implies a substantial 24% reduction in Clover Health Investments' revenue over the past 12 months. 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. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Clover Health Investments analyst has a price target of US$4.50 per share, while the most pessimistic values it at US$3.20. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. 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. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.6% annually for the foreseeable future. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Clover Health Investments going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Clover Health Investments has 2 warning signs (and 1 which is significant) we think you should know about.

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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.