As an emerging Medicare insurer, Clover Health Investments, Corp. (NASDAQ: CLOV) is utilizing its advanced software platform to provide seniors with affordable and high quality health plans. Considering the platform’s potential to disrupt the healthcare industry, many investors are bullish that CLOV stock could be a profitable long-term investment. With the company joining the Russell 3000 index, CLOV stock could see more investments from institutions since the company has the potential to become a major player in the healthcare technology industry.
CLOV Stock News
With only 2.6 doctors per 1000 people as of 2018, there is an extreme shortage of doctors in the nation and this is only expected to worsen as more doctors approach retirement age. Already, doctors are spending less time on average with their patients. In 2018, data showed that most physicians spent between 13 and 24 minutes with each patient – with a quarter spending less than 12 minutes. Meanwhile, only one tenth of doctors spent more than 25 minutes with each patient. In light of this, the healthcare industry is in a dire need for more advanced technologies to overcome this shortage.
Clearly its important for healthcare technology to become more integrated with each other. Hospitals already use an average of 16 electronic health records platforms which are spread out among several EHR vendors. This has contributed to a lack of interoperability which its now creating issues for the healthcare industry.
For this reason, CLOV is focused on addressing these issues for its Medicare Advantage members. Since they are 65 and older, these patients typically suffer from a variety of chronic health conditions. Treating chronic conditions when a patients’ data is spread out across several different platforms is not only burdensome for doctors but it impacts the level of care for these patients.
According to a CDC study in 2018, 129 million Americans had a chronic condition – including 68 million suffering from 2 or more chronic conditions. From this, 12.2 million people 65 and older had one chronic condition while 37.2 million had 2 or more chronic conditions. Clover Health’s goal is to improve treatment for members suffering from chronic health conditions using their unique platform to standardize care.
Clover Assistant
CLOV is looking to reduce these issues using its software platform – Clover Assistant which reduces variability in physicians’ decision making to offer a more affordable and better quality treatment. This is done by synthesizing large amounts of data from its members and using machine learning to establish evidence-based protocols which help standardize care.
Unlike other platforms, all the information regarding a patient is up to date in the system at the time of a patient’s doctor visit. At the same time, the protocols allow physicians’ to evaluate their patients’ medical history at a much faster pace. In light of this, Clover Assistant has the potential to help with care coordination, addressing cancer screenings, medication adherence, as well as early disease detection.
By leveraging this data CLOV believes that with time it could use its technology and business model to become profitable and attract a larger market share. But its current obstacle appears to be attracting enough members to collect more data to improve the Clover Assistant.
To attract more users, Clover provides reimbursement to physicians within 4 days of the visit and is reimbursing doctors double the Medicare rate for Medicare Advantage visits. By offering these incentives for doctors, CLOV could expand its market share.
Based on this, CLOV is changing the insurers role in this process by being more proactive than reactive. However, CLOV has to convince more doctors to use its software platform. While many physicians have been pleased with Clover Assistant, CLOV is facing an issue in wide-scale adoption of the Clover Assistant.
This issue could hinder the company’s growth since the platform requires additional data to continue improving its machine learning and predictive algorithms. In the long-run, wide scale adoption would help CLOV provide more affordable healthcare using the Clover Assistant and once this happens the CLOV stock forecast will be significantly brighter.
Medicare Advantage Plan
Looking to attract new members, CLOV offers a competitive Medicare Advantage plan which has similar co-pays and deductibles for physicians who are in and out of its network. At the same time, CLOV launched a Direct Contract program which allows the company to contract directly with physicians to use Clover Advantage for their original Medicare patients. As these efforts take root, CLOV stock price could increase with the number of lives under management.
After expanding its coverage to 13 new counties, CLOV will be offering its Medicare Advantage plan to a total of 220 counties across Alabama, Georgia, Mississippi, New Jersey, Pennsylvania, South Carolina, Tennessee, and Texas. Currently, the company has approximately 85,000 Medicare Advantage members but this number will likely increase after the enrollment period from October to December.
According to Clover’s President Andrew Toy, Clover is “aiming to generate industry-leading growth during this year’s AEP, as we have over the past several years, and we’re focusing our efforts on our existing footprint where we have a proven track record”.
CLOV Stock Insider Activity
While CLOV stock price is down compared to its 52 week high of $28.88, insider buying has remained strong. This is an especially bullish sign since insiders bought shares when CLOV stock was trading at an average PPS of $5.47 in 2021. With this in mind, the insider buying continued into 2022 since two open market purchases were made in March by Shapiro Lee and Chelsea Clinton.
Both members of the BOD, Clinton purchased shares at $2.53 for a total of $252 thousand while Lee bought shares at $3.10. Given that these insiders have not sold any shares and bought these shares at a higher PPS than the current CLOV stock price, this is a bullish sign for CLOV stock since these insiders may know what the company has planned.
CLOV Stock Institutional Ownership
In addition to insiders, CLOV stock has been witnessing increased interest from institutions after its run to $28.82. With 199 institutions holding long positions in the company, CLOV stock could prove to be a profitable long-term hold since these institutions are confident in the company’s growth potential. In total, 214 institutions hold 100 million shares of CLOV stock – representing almost a third of the company’s float.
Now that the company joined the Russell 3000 index, CLOV stock could witness an increase in its institutional investors and trading volume. This is the result of the Russell indexes being used by asset owners, asset managers, ETF providers, and investment banks to create ETFs, structured products, and index-based derivatives. As is, $1 trillion is indexed directly to Russell indexes so all the Index funds and ETFs that track the Russell 3000 index would be buying shares of CLOV as well.
CLOV Stock Analyst Ratings
Considering the company’s overall potential, CLOV stock has been given a hold recommendation by most analysts with 12 month price targets ranging from $2 to $7. Meanwhile, CLOV stock is considered a buy according to analysts from Citigroup, Cowen & Company, JP Morgan, Canaccord Genuity, and others with a price target of $3. Based on these analyst ratings, CLOV stock forecast could be bright for long-term investors.
Market Opportunity
On that note, the US healthcare market is growing at a substantial rate. In 2020, health care spending grew 9.7% – reaching $4.1 trillion – and accounted for 19.7% of the nation’s GDP. At the same time, Medicare spending grew 3.5% to $829.5 billion in 2020 while Medicaid spending grew 9.2% to $671.2 billion or 16% of the total national health expenditure. With 10 thousand new individuals becoming Medicare eligible every day, CLOV appears to be well-positioned to secure a significant share in this sector.
With this in mind, CLOV’s services could witness higher demand in the near future if 3 million Americans lose their health insurance in 2023 due to Congress’ inaction on premium subsidies which are due to expire later this year. If this happens, CLOV and other companies in the healthcare field could see an influx in members.
CLOV Stock Financials
In Q1, CLOV reported $2.49 billion in assets of which $723 million is cash and cash equivalents. Considering CLOV’s market cap of only $1.05 billion, the company could be extremely undervalued based on its assets. Meanwhile, CLOV grew its assets by 336% YOY to $874.4 million and projects $3 to $3.4 billion in revenues for 2022. These projections are based on Medicare Advantage’s expected revenues of $1 billion to $1.1 billion and Direct Contracting’s expected revenues of $2 billion to $2.3 billion.
In addition, CLOV is projecting 90% yearly growth in lives under management. With this in mind, CLOV’s members increased by 289% YOY to reach 257 thousand members. Despite this, CLOV is not expected to turn profitable in the near term. In an interview with Yahoo Finance, CLOV’s CEO explained that the management is not “tied to some near-term financial success”. Instead, the management is looking to see where CLOV stock price will be in the coming 5 to 10 years since the company is still in its infrastructure-building phase. For this reason, CLOV’s management expects the company to not witness significant progress over the next 3 to 5 years.
Media Sentiment
@ChampionVibe sees a bullish hammer candle formation on the four hour chart which could signal a rebound after this recent dip
@nikiped1a gave an update on CLOV’s short interest after its 28% jump at the end of June
Technical Analysis
The current CLOV stock price is $2.52 after an almost three week uptrend. CLOV stock has a strong support near $1.99 which shows that the market is valuing the stock above $2. This is based on the stock’s strong rebound off of this support after touching it three times so far this year. However, CLOV stock also has a strong resistance at $2.80 which the stock recently tested before dipping to $2.52.
Despite the MAs golden cross on July 8th, CLOV stock has dropped below the 50 MA. The stock could continue dropping towards its support at $2.46. This pullback could offer a good opportunity for traders to take a position ahead of Clover’s Q2 earnings on August 8th. But those looking to hold the stock for the long-term would find a more profitable entry point near its $2.08 support since this offers lower risk.
Accumulation has been trending upwards since the end of June but investors should be wary of a potential sell-off close to Clover’s Q2 earnings as many investors exit their positions. Due to the 9% drop over the last 4 days, CLOV’s RSI has dropped to 35. Since the RSI is approaching oversold, CLOV stock could see a rebound soon. The MACD is also bearish to the downside.
It remains to be seen whether CLOV is having a temporary pullback before continuing its run of if this is a trend reversal. However, considering the strong CLOV stock reddit community and the company’s 57.86% retail ownership if the stock see’s another beat on its Q2 earnings, CLOV stock could have another run up.
As for its share structure, CLOV has an OS of 378.9 million and a float of 331.7 million.
CLOV Stock Forecast
Through the Clover Assistant, CLOV has the potential to solve many of the issues faced by the healthcare industry. Given that CLOV is an insurer for Medicare Advantage members, Clover Assistant could give the company the edge it needs to emerge as a leader in this competitive market. Meanwhile, CLOV could be poised for good news in the near future due to its insiders recent buying activity. Since most insiders are holding their shares, many investors on the CLOV stock reddit and elsewhere are bullish that CLOV stock will be a profitable long-term hold.
Moreover, institutions appear confident that the CLOV stock forecast will continue to improve as the company works to lower its MCR. Now that the company has joined the Russell 3000 index, CLOV stock could have greater exposure to institutions and investors.
With this in mind, investors are watching CLOV stock closely for its Q2 earnings results. Considering that the company has shown consistent membership and revenue growth QOQ, the company could have another revenue beat this quarter. Next year, CLOV could show additional membership growth if 3 million Americans lose their healthcare insurance as many are predicting. Furthermore, CLOV is already expanding its coverage to 13 new counties which could help expand its membership at the start of 2023. With the healthcare market growing at an unprecedented pace, the CLOV stock forecast could continue to improve under Clover’s Health Board of Directors.
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