Meme stocks typically generate investor interest through social media forums, and most of the time their rallies are not backed by strong financials or market technicalities. Given the speculative nature of retail investors and these stocks’ supernormal price gains, they generally retreat following an extended rally.
Meme stocks in the healthcare sector are currently more susceptible to a market crash because investors are focusing on outdoor and cyclical stocks amid the fast-paced economic recovery.
Clover Health Investments, Corp. (CLOV)
CLOV is a Medicare Advantage (MA) insurer in the United States. Its MA plans include hospital coverage, doctor visits, and drug coverage, vision, dental, and hearing coverage. CLOV is based in Franklin, Tenn.
On April 6, Kaskela Law LLC announced the filing of a shareholder class action lawsuit against CLOV. alleging alleged deceptive financial reporting.
CLOV’s revenue increased 21% year-over-year to $200.33 million in the fiscal first quarter, ended March 31. However, its loss from operations increased 347.2% year-over-year to $119.09 million. Its net loss increased 71.9% from its year-ago value to $48.42 million.
A $819.22 million consensus revenue estimate for the current year indicates a 21.7% increase year-over-year. Analysts expect the company’s EPS to remain negative until at least 2022. CLOV has gained 74.9% over the past month and 5.8% over the past five days.
CLOV has an overall F rating, which equates to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with the weighting of each optimized to improve overall performance.
It also has an F grade for Value, Stability, and Sentiment, and a D grade for Growth and Quality. Among the 11 stocks in the Medical – Health Insurance industry, CLOV is ranked last. To see more of CLOV’s component grades, click here.
Sorrento Therapeutics, Inc. (SRNE)
SRNE is a clinical-stage and commercial biopharma company that develops therapies for cancer, autoimmune, inflammatory, viral, and neurodegenerative diseases. The San Diego-based Company operates through two segments: Sorrento Therapeutics and Scilex.
On June 11, SRNE announced the Medicines and Healthcare products Regulatory Agency’s (MHRA) approval for Phase 2 Clinical Trial for SRNE’s COVI-DROPS product candidate. However, it is uncertain whether the product will win final approval, and even if it does, it might take a while for SRNE to generate revenues from the drug.
SRNE’s total revenue increased 84.6% year-over-year to $14.26 million in its fiscal first quarter, ended March 31. Its loss from operations grew 96.7% from its year-ago value to $84.91 million, while its net income stood at $2.42 million, indicating a 103.5% improvement from a $69.18 million loss in the same period last year.
Analysts expect SRNE’s revenues to increase 53.9% year-over-year to $13.86 million in the current quarter, ending June 2021. However, the company’s EPS is expected to remain negative at least in the current year.
Shares of SRNE have gained 58.8% over the past year. The stock lost 2% intraday to close yesterday’s trading session at $9.70.
It is no surprise that SRNE has an overall D rating, which equates to Sell in our proprietary POWR Ratings system.
The stock also has a D grade for Momentum, Stability, Sentiment, and Quality. Among the 494 stocks in the F-rated Biotech industry, SRNE is ranked #391. To see additional SRNE Ratings for Growth and Value, click here.
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CLOV shares rose $0.04 (+0.30%) in after-hours trading Wednesday. Year-to-date, CLOV has declined -20.57%, versus a 15.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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