What Happened?
Shares of health insurance company Clover Health (NASDAQ: CLOV) fell 8.4% in the morning session after the stock's negative momentum continued as the company reported disappointing third-quarter 2025 financial results and cut its full-year profitability forecast.
Although revenue grew by 50.1% year-over-year to $496.7 million, beating expectations due to strong membership growth, the company's profitability raised concerns. Clover Health posted a net loss of $0.05 per share, which missed analyst estimates. Management pointed to higher-than-expected medical costs and increased healthcare usage from a surge of new members as reasons for the weaker results. More importantly, the company significantly lowered its full-year adjusted EBITDA guidance to a range of $15 million to $30 million, down from the previous forecast of $50 million to $70 million. This weaker outlook overshadowed the top-line growth, signaling to investors that near-term margins and profits were under pressure.
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What Is The Market Telling Us
Clover Health’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 24.2% on the news that the company reported disappointing third-quarter financial results and cut its full-year profitability forecast. While the Medicare-focused company saw its revenue climb by 50.1% compared to the previous year, its earnings per share missed forecasts. Looking ahead, Clover Health lowered its full-year guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a midpoint of $22.5 million, which was significantly below analysts' expectations and implied a reduction from previous forecasts. The company attributed the weaker outlook to higher-than-expected medical costs and increased healthcare usage trends among its members. This guidance overshadowed its revenue, which beat Wall Street's estimates, as investors focused on the pressure on future profitability.
Clover Health is down 15.8% since the beginning of the year, and at $2.64 per share, it is trading 45.3% below its 52-week high of $4.82 from January 2025. Investors who bought $1,000 worth of Clover Health’s shares 5 years ago would now be looking at an investment worth $262.71.
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