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Missed the Hims & Hers Rally? Clover Health Could Be Next

Shares of Hims & Hers Health Inc. (NYSE: HIMS) have made a splash in recent weeks, reaching a new all-time high of just under $73 per share. However, a few days later, most of the upside moved right back, crashing down to as low as $36 per share. Now, this is where most investors would throw in the towel and forget why they bought the stock in the first place.

This is alright; it’s human nature to still be convinced about a company’s story after such a steep decline. However, the market has shown these recent sellers that there are still some valid reasons for investors to keep hanging on to their shares of Hims & Hers stock for the long haul.

This assumption can be made by the way that the stock bounced back by as much as 24% from the lows hit last week, giving markets a reason to think that the bottom could be in now.

Even with this potential recovery underway, the sentiment is still on the vengeful side of the spectrum for investors who potentially lost their gains in Hims & Hers recently, so alternative views may be needed today. Assuming that this is the sentiment across the board in the technology stocks that improve the medical sector, there’s a clear path for Clover Health Investments Inc. (NASDAQ: CLOV) to take off just the way Hims & Hers did before the pullback.

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Price Action Favors Clover Over Hims & Hers Stock

If price action and performance are any indication of how the market overall feels about a stock, investors can look to where both Hims & Hers and Clover are trading today.

Given that Clover is now sitting at 82% of its 52-week high, compared to only 62% for Hims & Hers, investors could somewhat assume that the market now favors Clover.

But this price action is only the beginning, as there must be other fundamental factors at play for the company to justify its current trading. One could be the current Wall Street forecasts for earnings per share (EPS) in Clover, which hover around $0.03 for the second quarter of 2025.

This implies a significant jump from today’s net loss of $0.02 per share. Given that stock prices are typically driven by underlying EPS growth, this could open up a path for Clover to really take off in a similar manner to which Hims & Hers did earlier this year.

Other fundamental tailwinds are at play, though, such as the key performance indicators (KPIs) seen in the company’s latest quarterly earnings presentation. The first one of these indicators could be seen in the 30% annual growth in the average Medicare Advantage memberships.

Based on this jump in memberships, investors can see how Clover reported up to $330.7 million of insurance revenue, a 9.1% growth rate from the same quarter in the previous year.

With growth rates headed this way, it would make sense for Wall Street analysts to feel this confident about the company hitting net profitability in the coming months.

But How Much Upside Is There For Clover Stock?

Well, according to the consensus price target from Wall Street analysts, Clover stock’s fair valuation is set for $5.0 a share today. This calls for not only a new 52-week high but also a rally of up to 26% from where it trades today, proposing enough bullish upside for investors to consider in today’s setup.

Considering this view on valuations and EPS forecasts from Wall Street, it shouldn’t be a surprise for investors to see allocators from the Vanguard Group boost their holdings in Clover stock by up to 2.0% as of February 2025.

This may not sound like much on a percentage basis. Still, it did bring their net position to a high of $61.7 million today, or 3.9% ownership in the company.

Here’s an essential factor to consider in this recent purchase as well. These allocators were willing to pay up to 6.6x in price-to-book (P/B) for Clover stock today, a premium above the medical service plans industry’s 4.9x average P/B today.

Some would call this stock expensive next to its peers. However, seasoned traders would remind them that the market will always be ready to pay a premium for stocks that they believe have what it takes to outperform the peer group and the overall market, which seems to be a justifiable case in Clover today.

Written by Gabriel Osorio-Mazilli

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