$CLOV Earnings Outlook

2 мар. 2021 г.

From 2019 to 2020, CLOV posted a total revenue growth from 462.3M to 672.9M, net premium revenue growth from 456.9M to 665.7M, decrease in net loss from -363.7M to -91.6M, and a decrease in adjusted EBITDA loss from -175.5M to -74.4M, among others. CLOV also saw a 36.3% increase in membership and a 43.2% year-over-year increase in lives under Clover Assistant management to 58,056 membership and over 32,400 lives respectively.

For full year 2021 guidance, CLOV stated a total revenue expectation of 820M to 850M, net loss expectation of -210M to -170M, adjusted EBITDA loss expectation of -190M to -150M, loss per share of -$0.52 to -$0.42. Furthermore, they are also expecting a 17% to 21% growth in Medicare Advantage membership to 68,000 to 70,000 membership compared to year end 2020's 58,056.

Based on the above full year 2020 financial results and full year 2021 guidance reported by Clover Health, I believe it puts us somewhere in the middle of our bear case and base case as said according to our last CLOV Bear Base Bull outlook, which you can re-visit by looking at the related idea below.

In my opinion, despite being off-target, the financial and membership growth that they have posted from 2019 to 2020 has demonstrated their ability to deliver growth, proven the scalability of their business model, and reaffirmed Chamath Palihapitiya statement of CLOV having a predictable growth model.

However, I believe they have shot themselves in their foot with the full year 2021 guidance. Based on the figures they have posted, it tells me that they are expecting a slowdown in growth compared to what they have experienced from 2019 to 2020. This will not be viewed kindly by investors and Wall Street.

Going forward, I expect CLOV to continue trading within the bearish channel, within the range of $8.50 to $10.50. Unless further positive catalyst appears, I do not see CLOV breaking above the bearish channel yet.

Nevertheless, in an environment where many SPAC and companies are trading at a massive speculative values, I see CLOV being valued realistically at the moment and trading at a realistic price. Once given enough time to play out the growth that CLOV is currently building, it will be a long-term winner.

TLDR: Short-term: Underperform with a trading range of $8.50 to $10.50 unless more positive catalyst appears, Mid/Long-term: Easily >2x from current price.

This is not investment advice so please do your own due diligence!
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