CLOV: AI-driven care model and strong growth position the business for 2026 profitability

What Happened?

A number of stocks jumped in the afternoon session after a report revealed that the White House plans to pitch a two-year extension of Obamacare subsidies. 

The proposal would extend subsidies set to expire at the end of the year, with new eligibility limits for individuals with incomes up to 700% of the federal poverty line. These subsidies, a key part of the Affordable Care Act (ACA), help lower the cost of health insurance for consumers, making them crucial for insurers focused on the ACA marketplace. An extension would likely support sustained enrollment, securing a key revenue stream for these companies.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Surgical Equipment & Consumables - Specialty company Integra LifeSciences jumped 3%. Is now the time to buy Integra LifeSciences? Access our full analysis report here, it’s free for active Edge members.
• Healthcare Technology for Providers company Evolent Health jumped 8.6%. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free for active Edge members.
• Immuno-Oncology company Incyte jumped 4%. Is now the time to buy Incyte? Access our full analysis report here, it’s free for active Edge members.
• Patient Monitoring company iRhythm jumped 2.8%. Is now the time to buy iRhythm? Access our full analysis report here, it’s free for active Edge members.
• Health Insurance Providers company Clover Health jumped 5.5%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Evolent Health (EVH)

Evolent Health’s shares are extremely volatile and have had 45 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 3 days ago when the stock gained 13.2% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

Evolent Health is down 61.1% since the beginning of the year, and at $4.47 per share, it is trading 66.3% below its 52-week high of $13.26 from November 2024. Investors who bought $1,000 worth of Evolent Health’s shares 5 years ago would now be looking at an investment worth $302.30.

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Health Insurance Providers company Clover Health jumped 5.3%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free for active Edge members.
• Healthcare Technology for Patients company GoodRx jumped 4.7%. Is now the time to buy GoodRx? Access our full analysis report here, it’s free for active Edge members.
• Therapeutics company Moderna jumped 5.1%. Is now the time to buy Moderna? Access our full analysis report here, it’s free for active Edge members.
• Drug Development Inputs & Services company UFP Technologies jumped 5.3%. Is now the time to buy UFP Technologies? Access our full analysis report here, it’s free for active Edge members.
• Patient Monitoring company Masimo jumped 4.4%. Is now the time to buy Masimo? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Clover Health (CLOV)

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 15 days ago when the stock dropped 8.4% on the news that 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.

Clover Health is down 27.5% since the beginning of the year, and at $2.27 per share, it is trading 52.9% 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 $226.77.