Clover Health (NASDAQ: CLOV) recently came under fire from Hindenburg Research for allegedly unfairly luring retail investors into purchasing shares after failing to disclose that the company was under active investigation by the U.S. Department of Justice.
Clover stock has dipped following the accusation, and the ordeal has us thinking that it might be wise to look at these 3 alternatives to Clover for now.
Lemonade (NYSE: LMND) and Clover have one prominent similarity; they are both trying to bring a heavier reliance and dependence on technology use to dated and conventional industries that haven’t seen much change in recent years — insurance and healthcare, respectively.
Lemonade is expensive, but the bull case is strong. Lemonade leverages artificial intelligence (AI) and behavioral science technologies to create an easier and more efficient insurance experience. It currently only provides renters, homeowners, and pet insurance, but has ambitions for a life insurance product, a $730 billion market in the U.S. alone, and there’s a possibility the company will branch into auto insurance. Lemonade has already started its expansion into Europe.
Lemonade has a market cap of almost $10 billion, around 100 times the company’s trailing-12-month sales. This is expensive, but the company has some great growth indicators from its Q3 2020 earnings. Total customer count increased by 67% to 941,313 compared to Q3 2019. Premium per customer rose 19% year-over-year (YoY) to $201. Revenue was $17.8 million with gross profit rising 83% YoY to $7.3 million. So, though expensive, Lemonade is still a great long-term bet.
Teladoc Health (NYSE: TDOC) is a telemedicine and virtual health company, providing patients with affordable and convenient access to medical care 24/7. The company has been non-stop innovating to capture a larger share of the market, ensure continuous growth, and provide the best product to its client base. Teladoc recently acquired InTouch Health, which allows Teladoc to enable doctors and practitioners to connect to their clients virtually via in-app virtual sessions, and Livongo Health, which now provides monitoring and coaching services for patients with chronic conditions such as obesity, hypertension, and diabetes.
Livongo’s diabetes service has over 400,000 users, but over 34 million Americans currently suffer from diabetes, giving the service plenty of room to grow. The company has an exciting but useful and necessary product line that hasn’t even reached its full potential yet. Teladoc has yet to face a viable competitor for the range of chronic-care services Teladoc is currently providing. If you’re anticipating a market pullback sometime in the near future, Teladoc might be a great choice for you as healthcare stocks historically experience less of a hit than other industries in the midst of a financial crisis.
Teladoc has strong fundamentals, with revenue in the first nine months of 2020 jumping 79% YoY to $710.6 million with the company guiding for more than a 97% YoY increase in revenue for the full year. Total patient visits spiked 163% YoY with 80% of the company’s revenue coming from Teladoc access fees.
Moderna (NASDAQ: MRNA), along with other pharmaceutical companies, recently brought their COVID-19 vaccination to the market, putting the end of this pandemic within our reach. Moderna’s share price rose from $19 per share in February 2020 to $181 today. Due to Moderna’s successful phase 3 trials and the resulting FDA approval, confidence in Moderna has been growing with a hope that this progress is showing effectiveness and advancement of its mRNA research. Moderna is hoping to bring in approximately $11 billion in revenue from this vaccine this year.
Moderna tested its vaccine against new strains and noticed a drop in antibody levels. This has led to the production of a booster vaccine, which would be administered to reinforce our body’s ability to fight new strains. Moderna is also looking into creating strain-specific boosters that would target specific strains, like the South African strain. These two booster products show that Moderna’s COVID-19 vaccine production won’t just end after everyone is vaccinated.
Moderna tripled the cash on hand available between September 2019 and September 2020, from $1.1 billion to $3.3 billion, so they aren’t short of resources when it comes to research and development. It’s expected that Moderna will use much of the $11 billion estimated vaccine revenue for this year for further research and development of its mRNA technology, which eventually will be used to treat coronary heart disease as well as create a personalized vaccine for head and neck squamous cell carcinoma cancer.
A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free trial now!
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Adam loves innovative SaaS tech companies; in particular ones that give people the freedom to make money or start a side hustle, like Etsy, Fiverr and Shopify.