Downgrade: Here's How Analysts See Clover Health Investments, Corp. (NASDAQ:CLOV) Performing In The Near Term
The latest analyst coverage could presage a bad day for Clover Health Investments, Corp. (NASDAQ:CLOV), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the latest downgrade, the three analysts covering Clover Health Investments provided consensus estimates of US$1.3b revenue in 2024, which would reflect a painful 37% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 46% to US$0.23. Yet before this consensus update, the analysts had been forecasting revenues of US$1.5b and losses of US$0.17 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Clover Health Investments
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 37% by the end of 2024. This indicates a significant reduction from annual growth of 42% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.7% per year. 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 analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Clover Health Investments' revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Clover Health Investments, and we wouldn't blame shareholders for feeling a little more cautious themselves.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. 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.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
