Chamath Palihapitiya-backed Clover Health jumps 19% after sales forecast exceeds even the highest estimate

• Clover Health shares surged as much as 19% Thursday as the Medicare Advantage insurance provider's yearly revenue guidance outstripped expectations.
• The company backed by venture capitalist Chamath Palihapitiya sees 2021 revenue of $1.6 billion to $1.5 billion.
• The outlook is ahead of a consensus estimate of $811.3 million.

Clover Health Investments surged as much as 19% on Thursday after the Medicare Advantage insurance provider set its 2021 revenue forecast well above analyst expectations.

The company, which was taken public in January through a special purpose acquisition company, or SPAC, led by venture capitalist Chamath Palihapitiya, forecast full-year 2021 total revenue of $1.4 billion to $1.5 billion, which is above the $811.3 million Bloomberg consensus estimate. Analyst projections had come in between $796 million to $819 million.

The stock is still down 45% year-to-date, having fallen more than 50% from a record high reached in June that was spearheaded by retail investors active on Reddit and other social media sites.

Clover said its 2021 revenue outlook includes Medicare Advantage revenue of $760 million to $790 million and Medicare Direct Contracting revenue of $650 million to $700 million. The company also expects its Medicare Advantage membership to be in the range of 68,000 to 70,000 by December 31, representing a growth rate of 17% to 21% as compared with year-end 2020.

The company's second-quarter revenue came in at $412.5 million, higher than $172.1 million a year earlier and above the FactSet estimate of $193 million, with the increase driven by the company's Direct Contracting program. It swung to a loss of $0.78 per share from earnings of 1 cent a share in the same quarter last year.