CLOV Stock Rises as Q1 Earnings Beat Estimates, Revenues Up Y/Y

Clover Health Investments, Corp. CLOV reported breakeven earnings for the first-quarter 2025, narrower than the year-ago period’s loss of 5 cents. The bottom line surpassed the Zacks Consensus Estimate of a loss of 7 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Adjusted earnings per share (EPS) from continuing operations were approximately 5 cents compared with EPS of a cent in the year-ago period.

CLOV’s Revenues in Detail

Clover Health registered revenues of $462.3 million, up 33.3% year over year. However, the figure missed the Zacks Consensus Estimate by 3.1%.

The top line was aided by robust Insurance revenues.

Clover Health’s Segmental Details

The company derives its revenues from two primary business segments — Insurance and Other income.

Insurance revenues in the first quarter of 2025 totaled $456.9 million, reflecting a 33.7% year-over-year increase. According to management, this growth was primarily driven by a 30% increase in Medicare Advantage membership, strong member retention, and effective cohort management strategies.

Within CLOV’s Insurance segment, the Insurance Benefit Expense Ratio (BER) was 86.1%, a modest year-over-year increase, in line with expectations and impacted in part by the implementation of a Clover Assistant-enabled affiliate entity.

Other income generated $5.4 million in revenues for the first quarter of 2025, up 4.3% compared with the same quarter last year.

CLOV’s Operational Update

In the quarter under review, Clover Health’s net medical claims increased 33.3% year over year to $353.4 million. Salaries and benefits expenses decreased 0.3% year over year to $59 million, while general and administrative expenses rose 13.7% year over year to $50.7 million. Total operating expenses of $463.6 million increased 25.4% on a year-over-year basis.

Total operating loss was $1.3 million compared with the prior-year quarter’s adjusted operating loss of $22.7 million.

Clover Health Investments, Corp. Price, Consensus and EPS Surprise

Clover Health Investments, Corp. price-consensus-eps-surprise-chart | Clover Health Investments, Corp. Quote

Clover Health’s Financial Position

The company exited first-quarter 2025 with cash and cash equivalents of $155.4 million compared with $194.5 million at 2024-end.

Net cash used in operating activities from continuing operations at the end of first-quarter 2025 was $16.3 million against net cash provided by operating activities of $25.9 million a year ago.

CLOV’s Guidance

Clover Health has provided its outlook for 2025.

For 2025, Insurance revenues are estimated to be in the range of $1.8-$1.875 billion, suggesting 37% year-over-year growth at the midpoint.

Insurance BER is expected to be in the range of 87-88%. Average Medicare Advantage membership is likely to be in the band of 103,000-107,000, implying 30% year-over-year growth at the midpoint.

Our Take

Clover Health exited the first quarter of 2025 with breakeven earnings, which surpassed the consensus estimate. The robust uptick in consolidated revenues and key Insurance segment revenues was encouraging.

Shares of CLOV have risen 2.1% during after-hours trading on May 6 following the mixed quarterly performance and better-than-expected revenue guidance for 2025. The company’s shares have gained 6.4% in the year-to-date period compared with the industry’s growth of 8.5%. The S&P 500 Index has decreased 5% in the same period.

Clover Health delivered a strong start to 2025, reporting a 30% year-over-year increase in Medicare Advantage membership that surpassed prior growth rates. The company also maintained strong member retention and engagement through its technology-driven care model. Revenues increased 33% year over year, supported by disciplined pricing and geographic expansion. Adjusted EBITDA surged 279% year over year to $26 million, reflecting improved operational leverage despite investments in growth and quality initiatives.

Home care remains central to Clover Health’s strategy, with its Clover Care Services delivering personalized in-home support and care coordination, particularly for high-risk members transitioning from hospital stays or managing advanced illnesses. The integration of Clover Assistant into primary care continues to enhance proactive management, driving better outcomes and cost control. Recent research highlights the impact of Clover Assistant on earlier diagnosis and reduced hospitalizations for chronic conditions, such as congestive heart failure.

Looking ahead, Clover Health is confident in sustaining its growth trajectory and profitability, supported by favorable CMS rate updates for 2026 and the expansion of its 4-Star PPO plan. The company is also scaling its Clover Assistant technology beyond its own plans through Counterpart Health, its software division, which is gaining traction with external partners and promises a growing stream of high-margin SaaS revenues.

Challenges persist, including near-term margin pressure from rapid membership growth, as new members typically exhibit higher loss ratios initially. While adjusted SG&A expenses rose modestly, operating leverage improved with SG&A as a percentage of revenue declining to 18%. Management anticipates increased costs in 2025 due to investments in Clover Assistant, home care services, and new member onboarding, but expects these to yield long-term efficiency gains and enhanced unit economics, evidenced by significant loss ratio improvements in subsequent member years.

CLOV’s Zacks Rank and Key Picks

Clover Health currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the industry that have announced quarterly results are CVS Health Corporation CVS, Integer Holdings Corporation ITGR and Boston Scientific Corporation BSX.

CVS Health, carrying a Zacks Rank of 2 (Buy), reported first-quarter 2025 adjusted EPS of $2.25, beating the Zacks Consensus Estimate by 31.6%. Revenues of $94.59 billion outpaced the consensus mark by 1.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CVS Health has a long-term estimated growth rate of 11.4%. CVS’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.1%.

Integer Holdings reported first-quarter 2025 adjusted EPS of $1.31, beating the Zacks Consensus Estimate by 3.2%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%. It currently sports a Zacks Rank #1 (Strong Buy).

Integer Holdings has a long-term estimated growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.

Boston Scientific reported first-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion surpassed the Zacks Consensus Estimate by 2.3%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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