Clover Health Stock – Is Now the Time to Buy CLOV?
Clover Health Stock News – Healthcare is a tough market to invest in, with several unique risks to consider. But, one company is making strides to innovate the industry. Clover Health (NASDAQ: CLOV) is on a mission to simplify the healthcare process for seniors eligible for Medicare.
The health plan provider offers easy to understand Medicare options. Additionally, Clover’s cutting-edge technology platform, Clover Assist, provides doctors with personalized data. The information allows them to make better decisions while having access to the patient’s detailed records.
On top of this, Clover Health is operating in the industry at a reasonable time. Since the baby boomer generation will all be over the age of 65 by 2030, it presents a massive opportunity for the company.
With CLOV Stock price down over 50% this year, it’s at an attractive buying point. With that being said, is now the time to buy Clover Health stock?
Let’s take a closer look into the company and how it plans on changing the industry.
What Is Clover Health All About?
Rather than using patients’ data to charge more, Clover Health is using it to improve the healthcare system. The company uses its Clover Assist technology to provide doctors with a complete overview of your health.
Clover Health is a Medicare Advantage plan, meaning it provides the benefits of original Medicare, plus more.
Many of Clover’s healthcare plans offer:
- $0 premiums
- Low copays
- Low prescription costs
- And a cap on out of pocket expenses
Compared to other health plan providers, Clover focuses on delivering low-cost, easy to use coverage. Also, by using advanced tools, they can save money while using a more personalized approach.
Clover Health Stock Analysis
Chamath Palihapitiya, or as some know him as the “SPAC KING,” took the company public earlier this year through his investment company. CEO Vivek Garipalli said, “Today marks an important milestone in Clover Health’s mission to improve every life by enabling improved clinical decision making and achieving affordability in healthcare in the U.S.”
However, since the company started trading on the market, CLOV share prices have lost around 50% of their value. Does this mean it’s on sale? Or does it have further to fall?
Back in June, CLOV share prices exploded on news that the company was planning to expand its in-home care program. At the time, the stock price went from below $10 a share to over $28 in a few days. But, since then, it’s been all downhill.
At the same time, it may not have anything to do with Clover Health as a business. After all, many SPACs have lost significant value since the beginning of the year. Stocks like DraftKings (NASDAQ: DKNG) and ChargePoint Holdings (NYSE: CHPT) are also down from their highs earlier in the year. The S&P SPAC Index shows, on average, SPACs are down 24% so far in 2021.
With that said, Clover Health stock is currently sitting on solid support around $7.75 – $7.85 area. On top of this, when considering the company’s Price/Sales metric of 3.62, it’s the cheapest it’s ever been.
And, CLOV is starting to trend on socials. It’s currently in the top trending stocks on Stocktwits, indicating increased interest.
Clover Health Recent Business Developments
It seems a lot is going right for the company as of recently. But, the share price would have you thinking otherwise. Here are a few of the company’s latest developments that could push the stock higher.
1) PPO Plan Upgrade
The CMS just upgraded Clover’s PPO plan to a 3.5-star rating. The upgrade is a positive as the company works to make a name for itself in healthcare. With over 90% of Clover’s memberships as PPO plans, the upgrade is welcomed.
2) Expansion Plans
Again, the CMS is helping to improve Clover’s outlook by approving its plans to expand into 101 new counties. This could have a huge impact on Clover Health stock. The new territories are spread out between its existing states (GA, NJ, SC, TX) and adds a new one in Alabama.
Furthermore, the approval will allow Clover Health to expand and offer its services to a bigger market of people.
3) Athenahealth Partnership
More big news for the company comes as it announces a partnership with Athenahealth, a cloud-based healthcare company. Moreover, it will allow Clover to integrate its technology into Athenahealths marketplace.
4) Launching in Florida
Through a strategic partnership with ValueH, Clover Health is now launching in Florida. Additionally, ValueH will help provide ACOs and MSOs starting in 2022. The partnership is helping them expand into new territories while also providing new services.
Clover Health Is Still Growing
Even with the price of Clover Health stock being down (currently trading around $8), the company is still growing. According to the company’s second-quarter earnings, it’s well-positioned to continue its growth. Here are a few highlights from the report:
- Total Revenue grew by 140% to $412.4 million from the previous quarter.
- Total lives under Clover’s care also rose to 129,000, increasing 126.3% compared to June 2020.
- Cash and cash equivalents came to $630.3 million at the end of June.
- Lives under Clover Assistant Manager grew 229% to around 95,000 from the previous year.
Although the company is growing its top line, it still had a net loss of $138.7 million in the quarter. Clover also mentioned the ability to improve internal processes and improve star ratings as opportunities for the company to capitalize on for future growth.
Clover Health Stock Forecast – Where Does Clover Health Go From Here
All in all, Clover Health has huge potential in the healthcare industry. The sector badly needs a makeover, and we’ll see if Clover has what it takes to become an industry leader.
It’s essential to keep in mind that the market can be highly competitive. And with other names also entering the “affordable healthcare” area, it will need to do more to secure a spot in the industry. But, with its innovative technology, Clover Health can do it.
Generally speaking, CLOV stock is trading at a discount when compared to its price history. On top of this, Medicare Advantage is the fastest growing area of healthcare insurance. Spending on Medicare is projected to double in the next ten years.
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About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.