Clover Health Investments (NASDAQ: CLOV) and American Well Corporation (NYSE: AMWL) are two small-cap companies reshaping the healthcare landscape. Investors are keen to understand which of these companies presents a more attractive stock option. This analysis contrasts the two based on key metrics such as profitability, valuation, risk, and analyst recommendations.
Profitability and Valuation Insights
Clover Health has demonstrated stronger profitability metrics compared to American Well. Specifically, Clover Health boasts higher net margins and returns on equity and assets. When it comes to valuation, Clover Health also leads, reporting greater top-line revenue and earnings per share (EPS) than its competitor. Currently, Clover Health is trading at a price-to-earnings ratio that is lower than that of American Well, suggesting it is the more affordable investment option at this time.
Risk Profile and Analyst Recommendations
In terms of volatility, Clover Health holds a beta of 2.07, indicating that its stock price is 107% more volatile than the S&P 500 index. In contrast, American Well features a beta of 1.24, reflecting a 24% increase in volatility relative to the index. This difference in risk profiles may influence investor decisions based on their risk tolerance.
Analyst ratings present a mixed picture. According to MarketBeat, Clover Health has a consensus target price of $3.93, which implies a potential upside of 72.15%. On the other hand, American Well has a higher consensus target price of $8.33, indicating a potential upside of 116.84%. This suggests that analysts view American Well as the more favorable option, potentially due to its higher growth potential.
Ownership Structure
Examining the ownership structure reveals significant differences between the two companies. Approximately 19.8% of Clover Health shares are held by institutional investors, compared to 56.1% for American Well. Additionally, insider ownership stands at 24.1% for Clover Health, while American Well has 12.8% of its shares owned by insiders. High institutional ownership typically indicates confidence from large investors in a company’s long-term prospects.
In summary, Clover Health Investments excels in twelve out of the fifteen factors compared against American Well. Despite its strengths, analysts favor American Well due to its higher potential upside.
About Clover Health Investments: Founded in Franklin, Tennessee, Clover Health provides Medicare Advantage plans across the United States. The company operates through two segments: Insurance and Non-Insurance. Its notable offering, Clover Assistant, is a cloud-based platform that aids physicians in managing chronic diseases and accessing personalized patient insights.
About American Well: Established in 2006 and headquartered in Boston, Massachusetts, American Well focuses on delivering digitally enabled hybrid care solutions. The company’s Converge platform facilitates various healthcare services, including virtual primary care and chronic condition management, thereby enhancing patient access to care.
Investors are encouraged to evaluate these factors thoroughly as they consider their positions in these two healthcare companies.
