Clover Health climbs after Needham initiates coverage with Buy, $6 target

Clover Health (CLOV) stock rose 4.3% in pre-market trading after Needham initiated coverage with a Buy rating and $6.00 price target, citing its Medicare Advantage rating and cohort economics. The company's upcoming conference presentation and Q3 earnings report also contributed to the positive sentiment. The Nasdaq Composite was up 0.5% in pre-market.

Humana's Medicare Advantage star ratings improved significantly for 2027, with 93% of members in plans rated 4 stars or higher, up from 41% in 2026. This could generate $3B+ in additional revenue in 2028, according to TD Cowen. Alignment Healthcare saw a major decline, potentially losing $170M in revenue. CMS changed its star ratings methodology for 2027.

CMS released 2027 Medicare Advantage star ratings, with Humana rebounding to 93% of enrollees in high-scoring plans, up from 20% in 2026. Clover Health saw all members in four-star plans, while Aetna slipped. Analysts rated results as positive for Humana, neutral for Elevance, Centene, and UnitedHealthcare, and negative for Aetna and Alignment Healthcare.

Clover Health (CLOV) stock rose 10.7% premarket after CMS awarded its PPO Medicare Advantage plans a 5-Star rating and HMO plans a 4.5-Star rating for 2027. The ratings, excluding disputed measures, boost payments and enrollment. Shares later cooled to $4.81, up 5%. CLOV is up 99.5% YTD but still below its 52-week high.

Clover Health Investments (CLOV) reported that nearly half of its Medicare Advantage members joined in 2025 or 2026, impacting short-term profits. Membership grew 48% YoY to 157,000, with new members accounting for 49%. Despite a 70% stock return over 12 months, CLOV's revenue declined 0.7%, and gross profit grew slower than revenue. Management raised full-year guidance but cautioned about future trends.

Clover Health's PPO Medicare Advantage plans received a 5.0 Star rating and HMO plans 4.5 Stars for 2027, impacting 2028 payments. CMS removed 20 measures for PPO plans, raising their rating. Clover's MA membership grew ~48% YoY to >157,000 members, with 98% in PPO plans. The company ranked #1 among non-SNP PPO plans with >2,000 members on core HEDIS measures, scoring 4.82 out of 5.