Clover Health (CLOV) has delivered a stellar performance in the fourth quarter of 2021, as both earnings and revenues exceeded expectations. Shares of the next-generation healthcare company have rallied 14.9% in Wednesday’s extended trading session to close at $2.31.
Total revenues of $432 million surpassed analysts’ expectations of $408.1 million. The company had reported total revenues of $166.2 million in the fourth quarter of 2020. Markedly, revenues consist of $201 million in premiums earned and $228.6 million of Direct Contracting revenue.
As of December 31, 2021, while lives under Clover Management were about 129,996, up 124% year-over-year, lives under Clover Assistant Management grew 223% to about 96,000.
The company recorded a normalized Medicare Advantage (MA) Medical Care Ratio (MCR) of 96.7%, compared to 98% in the same quarter last year. Normalized adjusted EBITDA came in at a negative $68.5 million, higher than the negative $41.5 million in the prior-year quarter.
The President and CTO of Clover Health, Andrew Toy, said, “We are singularly focused on creating great, sustainable healthcare and have centered our strategy on building and deploying physician-enablement software that we believe will enable every physician to deliver data-driven value based care.”
Outlook
For 2022, the company projects total revenues to be in the range of $3 billion to $3.4 billion. MA MCR is expected to be in the range of 95% to 99%.
Medicare Advantage membership is expected to average 84,000 to 85,000, reflecting growth of 26% to 27% from the 2021 average. For the Direct Contracting program, Clover Health projects the average number of aligned beneficiaries to be between 160,000 and 165,000, compared to an average of 62,125 in 2021.
Price Target
Based on 1 Buy, 3 Holds and 1 Sell, the stock has a Hold consensus rating. The average Clover Health price target of $3.80 implies 89.1% upside potential from current levels. Shares have declined 85.6% over the past year.
Negative Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Clover Health, as 8.5% of investors on TipRanks decreased their exposure to CLOV stock over the past 30 days.
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