The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how health insurance providers stocks fared in Q3, starting with Clover Health (NASDAQ: CLOV).

Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care.

The 12 health insurance providers stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 1.6% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.7% since the latest earnings results.

Clover Health (NASDAQ: CLOV)

Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.

Clover Health reported revenues of $496.7 million, up 50.1% year on year. This print exceeded analysts’ expectations by 5.4%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ revenue estimates but full-year EBITDA guidance missing analysts’ expectations significantly.

“Our model of care continues to perform well as we bring our technology-powered care to more Medicare Advantage seniors," said Clover Health CEO Andrew Toy.

Clover Health pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. The company added 2,903 customers to reach a total of 109,226. Still, the market seems discontent with the results. The stock is down 5.9% since reporting and currently trades at $2.62.

Is now the time to buy Clover Health? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: CVS Health (NYSE: CVS)

With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.

CVS Health reported revenues of $102.9 billion, up 7.8% year on year, outperforming analysts’ expectations by 4.1%. The business had an exceptional quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.9% since reporting. It currently trades at $77.36.

Is now the time to buy CVS Health? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Molina Healthcare (NYSE: MOH)

Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.

Molina Healthcare reported revenues of $11.48 billion, up 11% year on year, exceeding analysts’ expectations by 4.7%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS guidance for next quarter estimates.

As expected, the stock is down 27.5% since the results and currently trades at $141.09.

Read our full analysis of Molina Healthcare’s results here.

Centene (NYSE: CNC)

Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.

Centene reported revenues of $49.69 billion, up 18.2% year on year. This result topped analysts’ expectations by 3.7%. It was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

The company lost 36,800 customers and ended up with a total of 27.97 million. The stock is up 3.2% since reporting and currently trades at $34.25.

Read our full, actionable report on Centene here, it’s free for active Edge members.

Humana (NYSE: HUM)

With over 80% of its revenue derived from federal government contracts, Humana (NYSE: HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Humana reported revenues of $32.65 billion, up 11.4% year on year. This number surpassed analysts’ expectations by 2.1%. Taking a step back, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but a slight miss of analysts’ customer base estimates.

Humana had the weakest full-year guidance update among its peers. The company added 150,000 customers to reach a total of 14.99 million. The stock is down 15.3% since reporting and currently trades at $238.90.

Read our full, actionable report on Humana here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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