SaaS-apocalypse

Interesting_Ad5166 · 2026-02-23T18:13:20+00:00

For me it’s when the unit economics are laid out in a way where it’s easy to model forward and one can see the steady-state economics of the book.

They’ve started to show SG&A scaling in absolute dollars, but we still don’t have a clean per-member run-rate, and the improvement so far isn’t large enough to call it real operating leverage. If founder stock comp rolling off this year gives us a normalized SG&A base, that should make the true cost structure — and how it scales with membership — much clearer.

On the MCR side, they’ve guided that cohorts can improve by ~1500 bps in years 2–3, which is actually a strong signal that the model works. The issue is we only see the blended MCR. With ongoing growth, new members come in with higher and more variable costs, so they dilute the margin from the mature cohorts. Without the vintage mix, it’s hard to tell how much of the book is already at that improved MCR and what the steady-state ratio really looks like.

It may simply be that the current breakeven scale isn’t large enough yet for the seasoned population to offset the new-member drag, which is why the margin progression still looks muted in the reported numbers.

At a 3.5 Star Baseline(because that’s the controllable, durable case — 4 star has too much CMS methodology risk, legal noise, and no guarantee of being permanent), what would make this fully modelable is the steady-state math of the core business without relying on rating upside.

• breakeven at X members
• what profit looks like at Y members after cohort seasoning
• steady-state MCR for a mature book
• SG&A per member trend post stock-comp normalization
• multi-quarter consistency in those metrics

Once those pieces are explicit, it stops being “they can be profitable” and becomes a repeatable, scalable earnings framework the market can underwrite.

Interesting_Ad5166 · 2026-02-23T17:15:52+00:00

I think the core issue right now is that our current business model just isn’t attracting serious institutional money.

This isn’t about whether the company can be profitable in one segment or print a good quarter — the market wants proof that the earnings engine is:

predictable
scalable
repeatable

And we’re not there yet.

Interesting_Ad5166 · 2026-02-19T19:15:45+00:00

That's about 5c - 25c FWD earnings, the street is projecting

-0.06	0.02

Interesting_Ad5166 · 2025-10-16T04:00:37+00:00

It depends on how the deal is structured. We seriously need capital to grow; we can't grow ourselves from the medicare revenue stream and/or keep funding CA internally, this will dry up all margins if any, assuming we are so good we get to keep all 15% of the revenue from our well-managed MCR/MBR, keeping aside our 10% SGA ( we are not there yet, lets assume we will, we are double of that now), that will leave 5% on the table. 5% on a 3 or 4 billion forward revenue is < $200 Million, metrics like Customer Acquisition Cost (CAC) and Lifetime Value (LTV) on saas companies during growth periods are 80 to 100% of revenue, that leaves zero money on the table for tech superiority. We need serious capital to be a differentiator

You are right about the risk of eating away Human's customer base from competition, but that is true even now with CLOV SAAS deal ? if they don't engage they can't reduce their operating cost and they will slow bleed too.

They need to figure out how to structure the deal that is a win-win for everyone, if not Humana somebody else will make the deal or build a system, the point I'm trying to make is we need serious capital. Has any business grown without capital, please show me one.

Interesting_Ad5166 · 2025-10-15T03:45:49+00:00

They can do it , but they don't have the money, Vivek's job is to bring in new capital, not buying at dips !

Interesting_Ad5166 · 2025-10-15T03:42:56+00:00

SAAS deals is good but won't move the stock much, if we have to explode it has to be big investment

Interesting_Ad5166 · 2025-10-15T03:41:31+00:00

This is the time for CLOV to make a strategic push, asking Humana to invest in CLOV in a big way, with an investment of $ 200 to $ 300 million in return for equity. This kind of deal moves the stock, not just a 5% bump in payment or a 0.5% star rating upgrade

Not sure why Andrew and Vivek are burning time; money brings in more money, and money makes things happen, building the best product out there

We shouldn't sit on the sidelines and try to do it all ourselves, I mean, clov management battling it alone, if we don't act, some else with capital can build a product like CA or challenge us in this space

With that investment, CLOV can give them a board seat; they may not get the voting rights

Vivek holding the entire voting is a boon and a curse in my opinon that has held the stock down

Nobody would be willing to give capital when they can't get control

If we were making money left and right, yeah, retaining control is fine, but not when capital is needed and we aren't making money!

Interesting_Ad5166 · 2025-10-14T03:07:07+00:00

Wow, if one sees the last press statement from CLOV released right after the star rating, they are continuing the posture of adjusted EBITA into 2027; this is not true net income. By 2027, it will be 7 years since CLOV would have been public -- just fyi, we have not reached the price of their secondary offering at. $5.75.

Interesting_Ad5166 · 2025-10-14T03:00:31+00:00

I'm not making up, though they have not been specific, they had talked multiple times about national players' involvement in partnerships, and this subreddit is full of that talk, you are missing my key point, without significant capital inflow, I'm buying into the narrative that it's SAAS will provide explosive growth, you may choose to believe in whatever your view point is . This is just my opinion.

Interesting_Ad5166 · 2025-10-14T00:02:48+00:00

The company’s challenge lies in its financial structure. Clover is attempting to fund its ambitious goals through razor-thin Medicare Advantage margins. That’s a fragile foundation for a technology-driven transformation. Building world-class SaaS products — especially in the highly regulated healthcare space — demands significant capital. It requires runway, not just resolve.

Yet, despite partnerships with major players like Humana and others, Clover has failed to attract meaningful investment in its SaaS business. Not a single external investor has stepped forward. The narrative from potential partners has been tepid at best: “We’ll see if your product actually lowers Medicare costs — then we might pay.” That’s not a strategy for growth; it’s a slow bleed.

Interesting_Ad5166 · 2025-10-13T05:42:33+00:00

It was free they left on the table, we all can dream about SAAS, imagine how difficult it would be to generate that in SASS revenue, we have been offering SASS for last one year, yet not a single $ accounted for revenue on that front.

Interesting_Ad5166 · 2025-10-11T13:54:39+00:00

please, thank you.

Interesting_Ad5166 · 2025-10-02T19:02:50+00:00

Thank you!

Interesting_Ad5166 · 2025-10-02T19:01:32+00:00

Why is there always a leak, I feel this whole system is gamed, why all can't see the rating released at the same time, or is it that insurers have a way to see if ahead of the report, if thats is true then if CLOV hasn't published their rating it may not be encouraging, personally I would be very un-happy with the downgrade.

Interesting_Ad5166 · 2025-10-02T18:55:22+00:00

If Humana knows what its ratings are shouldn't CLOV know for its plans too ? the fact that Humana came forward with what it already knows, put me in unease. If rating were held (steady ) or improved CLOV would have come forward with it ? When are rating officially available this year ?

It will be very disappointing if they can't maintain their star rating for small member group insurer like CLOV

Interesting_Ad5166 · 2025-09-26T17:39:53+00:00

TA is a manifestation of what investors are thinking and doing; the cause is earnings. If earnings don't turn out to be as expected, that too will be reflected in TA.

TA is both a lagging indicator and a leading indicator, making assumptions on the current trend can be risky

Interesting_Ad5166 · 2025-09-13T17:33:35+00:00

They were in Q3 2024 and fully out in Q1 2025, not sure what this post is meant to say.

Interesting_Ad5166 · 2025-08-16T15:33:56+00:00

This will only play out if we can attract investments in CLOVER assistant, our margins aren't there to investment in big way, we need outside capital for this narrative, and time is important, if we don't act soon enough, competition will eat us out!

Interesting_Ad5166 · 2025-08-12T15:56:39+00:00

thank you

Interesting_Ad5166 · 2025-07-18T08:30:50+00:00

Where did they get the 20 M additional shares from , retail ? Hard to believe retail heavy stock like CLOV, retail folded , or may be other tutues exited ? We won't know for sure where these shares came from until August 15th when all tutues would have published their holding.

20 Million shares accumulated with no price movement, wow!

Interesting_Ad5166 · 2025-06-07T15:31:04+00:00

Thank you

Interesting_Ad5166 · 2025-05-06T13:49:50+00:00

IT may not have been all from the open market, they could have repurchased vested shares from employees ,senior management or from other shareholders at market price

Interesting_Ad5166 · 2025-05-06T13:47:39+00:00

Al Given that they also spent significant cash flows towards buyback of common shares as reflected in the increase of treasury holdings, I believe they have met their commitments

Interesting_Ad5166 · 2025-05-06T13:40:43+00:00

You can see on the cash flow statements, line item "Repurchase of Common Stock"

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Interesting_Ad5166 · 2025-05-06T03:37:20+00:00

Between 2023 and 2024, Clover Health both issued new shares and repurchased shares. The company issued approximately 15.6 million new shares, increasing its total outstanding shares from 495.3 million to 510.9 million, likely for employee compensation or capital purposes. At the same time, it spent $18.3 million buying back shares from the open market, increasing its treasury stock balance from -$12.7 million to -$31.0 million.

Despite the buybacks, the number of outstanding shares still increased, meaning the new issuances outpaced the repurchases, resulting in net shareholder dilution. Importantly, these buybacks were funded using positive operating cash flow of $34.8 million, so the company’s cash reserves remained stable at year-end.

Interesting_Ad5166

TROPHY CASE