Jul 29, 2022

general Analysis

[4 min Read]

As you may know, **Clover health investments, corp. (NASDAQ: CLOV)** is one of the most well-known retail stocks in the Healthcare industry. This analysis will examine CLOV's key financial metrics and ratios to determine a price prediction for its stock. Keep in mind that this stock forecast takes several assumptions into account, which may hinder the accuracy of the price target achieved. I'll share my CLOV stock price prediction, then show you the approach and assumptions that I used to calculate my **CLOV stock forecast.**

Stock forecasting is hard, I don't know what the future will hold, and neither do Wall Street Analysts. If either of us could, we would be extremely wealthy and never have to work again. What I can say, however, is that we can use available data to determine a reasonable CLOV stock forecast to make us more informed and knowledgeable about our potential investments.

The Clover health stock price prediction of $2.57 was derived from 2 main valuation methods (which are averaged for the final price target you see above). I'll dive into the approach to show you how I determined how I “predicted” a stock price of $2.57 for CLOV.

- CLOV Financial Growth Metrics
- CLOV Comparable Companies Analysis

This section of the analysis will focus on CLOV's forward P/E and EPS ratio estimates in order to arrive at a CLOV stock forecast.

CLOV's forward Earnings Per Share have been estimated to be** -3.83**. Furthermore, CLOV's forward Price to Earnings Ratio has been forecasted to reach **-0.64**. By having both CLOV's forward P/E and EPS, we can multiply them together to reach a CLOV stock forecast of **$2.45 per share**

There are other ways to predict the price for CLOV but I would argue that P/E, EPS, and Earnings Growth are the most commonly used financial metrics by analysts and investors. This is why I used them to forecast CLOV's stock price.

In order to undergo a comparable analysis, we need to outline CLOV's main competitors. These competitors need to have; a stock, valid financial ratios, operations similar to CLOV, and a market cap similar to CLOV (if possible).

Keeping this in mind, here are CLOV's closest competitors:

PDCO, ALKS, ATRC, NUVA, PRVA, SANA, SWTX, AHCO, OLK, MMSI

**Price to Book (P/B):**CLOV's current P/B ratio is 2.67, compared to the average P/B ratio of CLOV's peers being 3.29. This implies that CLOV is undervalued and their share price should change by a factor of 23.49% to be at fair value (based on CLOV's P/B compared to the P/B of their peers).**Price to Earnings (P/E):**CLOV stock P/E ratio is currently -2.12, compared to the average P/E ratio of CLOV's peers being -1.52. This implies that CLOV is overvalued and their share price should change by a factor of -28.59% to be at fair value (based on CLOV's P/E compared to the P/E of their peers).

Overall, CLOV stock is overvalued and needs to experience a change in the stock price of (an average of) -2.55% to be considered “at fair value”. Applying this percentage change to CLOV's current price of $2.76 implies a forecasted price of $2.69

Analyst Ratings have provided a relatively strong indicator of future price movement, which is why they are used to (hopefully) support our CLOV stock forecast. There are a total of 14 analyst ratings for CLOV, which are distributed as follows:

6 Buys

4 Holds

4 Sells

As you may have been able to tell 42.86% of analysts have given the CLOV stock a 'buy" rating. Based on the current CLOV analyst ratings there seems to be an overall bullish sentiment, with analyst "buy" ratings forming a minority of total ratings given. However, despite the "buy" rating being a minority, it is a larger minority than the amount of "sell" ratings.

Let's end this analysis by using the information accumulated to answer the question that was posed at the very start of this analysis **"Is the CLOV stock a buy?" **

Based on the overall CLOV stock forecast of $2.57 per share (derived from P/E & EPS, and comparable valuations), the current price of CLOV is $2.76, and the slightly bullish analyst sentiment for the CLOV stock, I would disagree with the analysts and say **CLOV is a sell (or potentially a hold). **

Let me know what you think, happy to dive into other aspects of CLOV to help you make an informed investment decision.