Clover Health posted a $48.4 million loss in the first quarter of 2021, nearly doubling its year-over-year losses as medical costs jumped under the pandemic.
The startup insurer reported a $28.2 million loss in the first quarter of 2020, according to the company's earnings report released this week. Clover's stock values took a nosedive following the financial reporting, dropping from about $7.70 per share at 10:30 a.m. Monday to $6.82 per share at market close.
Stock prices have yet to rebound fully, though they did rise Tuesday. Clover's stocks opened Wednesday at $6.61 per share and stayed at about $6.87 per share by noon, according to Google stock data.
The company did beat Wall Street analysts' projections on revenue, reporting $200.3 million. However, Clover's medical care ratio ballooned to 107.6% in the quarter, compared to 89.4% in the first quarter of 2020.
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Clover executives said they believe its medical care ratio is often higher than competitors' due to its benefit offerings and lower out-of-pocket costs for members.
Clover Health has come under fire following a scathing February report from Hindenberg research that alleged the company misled investors in the lead-up to going public through a special purpose acquisition company deal.
In the report, Hindenberg said that Clover had failed to disclose that it was under investigation by the Department of Justice for a range of issues including kickbacks and marketing practices. Clover said the allegations were "completely untrue," CNBC reported.
Following the report's release, multiple class action lawsuits were filed against Clover by investors.
Analysts at the Motley Fool said potential investors should adopt a "wait and see" approach regarding the lawsuits and that potential bright spots for investors to watch later this year include the insurer's new direct contracting model and its potential for Medicare Advantage membership growth.
Clover is aiming to add between 70,000 and 100,000 members this year, which would double its membership. The company reported 66,300 members in the first quarter of 2021, up 18% from the prior-year quarter.