Clover Health’s stock dipped Feb. 28 after the company announced an earnings per share loss of four cents and a 2% miss on quarterly revenue estimates, said Zacks Investment Research.
The company recorded a full-year adjusted EBITDA of $70 million, a huge year-over-year increase of $112 million. Quarterly insurance revenue came in at $331 million, and the company’s insurance benefits ratio improved from 87.4% in the fourth quarter of 2023 to 82.8% in 2024.
Its stock is down more than 5%, plunging to less than $4 a share.
“The core drivers of our business are aligned and accelerating, and we’re well positioned to execute upon our strategic goals during our next phase of growth,” said CEO Andrew Toy in earnings call comments aimed at differentiating Clover from other Medicare Advantage (MA) insurers.
“In short, we accomplished precisely what we promised—and more,” said Chief Financial Officer Peter Kuipers.
Clover is projecting an insurance revenue of at least $1.8 billion but does not expect a higher adjusted EBITDA than in 2024. The goal ranges for adjusted EBITDA and adjusted net income are both between $45 million and $70 million.
Clover received a final cash payment $39 million from participating in the ACO REACH program.
The insurer’s membership is expected to increase by approximately 30% in 2025. Clover expects at least 103,000 members, up to 107,000 members.
“Within the new member cohort from this annual enrollment period, the vast majority of our growth came in the form of switchers from other MA plans,” said Kuipers. “This nuance is important because MA switchers typically have more health data that we are able to equip physicians with as compared to other types of new members.”
Because of the new cohort, Clover expects its loss ratio will increase as it “takes some time” for the company’s care management model to be effective, he added.
Toy declined to say when AI platform Counterpart Health’s financials would be significant enough to be incorporated into the earnings results but said they are looking to use the software to increase total lives in the Clover ecosystem.
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