Clover Health Share Price Rebound Has Stalled. What Next?

Summary:
• Clover Health share price has risen in the past few months but its recovery has stalled. What next for the CLOV stock?

Clover Health share price recovery has stagnated in the past few days. The stock is trading at $3.53, which is about 78% above its lowest level this year. It has been unmoved recently as investors wait for another catalyst. As a result, the company’s market value has moved to about $1.66 billion, which is substantially lower than its all-time high.

CLOV resurgence fades

Clover Health Investments (CLOV) is a relatively new company in the medicare industry. It is a preferred provider organization (PPO) and health maintenance organization (HMO) that has thousands of customers in the US. It targets a growing industry considering that healthcare costs in the country have been growing rapidly in the past decades. For example, the total national health expenditure has risen to more than $3.6 trillion.

Another market opportunity for Clover Health is the fact that 81% of all consumers are dissatisfied with their healthcare experience. The firm estimates that its total addressable market (TAM) is about $270 billion and is expected to grow to $590 billion in 2025. Also, it estimates that over 10,000 people become eligible every day.

Clover Health’s business has been growing at a rapid rate. For example, it had operating revenue of over $1.4 billion in 2021, up from the previous $672 million. However, this growth has come at a cost considering that its net loss rose from over $136 million to more than $587 million. As a result, analysts who have tracked the company have mixed outlooks. 

For example, those at Credit Suisse and SVB downgraded the stock, while those at Canaccord Genuity and Cowen have upgraded the stock. Meanwhile, the company’s insiders have been buying its stock, which is a sign of confidence,

Clover Health share price forecast

The CLOV stock price has been tilting upwards since February, when the company published mixed earnings. At the time, its $432 million revenue was better than estimates, while its EPS of -$0.44 missed analysts’ estimates. 

The company’s shares have moved slightly above the 25-day and 50-day moving averages. The stock has also moved above the important resistance at $3, which was the highest level on February 3rd. It has also formed a small inverted head and shoulders pattern. Therefore, while Clover Health shares are risky, it is likely to keep rising. If this happens, the next reference level will be at $5.