What happened
Waterdrop (WDH 3.47%) was down on an otherwise up Wednesday for stocks. The insurance provider released its latest set of quarterly results, and investors were none too pleased. They sent Waterdrop's stock to a more than 4.4% decline on the day.
So what
Waterdrop's unaudited first-quarter figures show that the company had revenue of just under 649 million yuan ($92 million), which was down notably from the more than 883 million yuan ($131 million) in the first quarter of 2021.
But this was 7% higher than the preceding quarter, a development the company attributed to a "business strategy ... adjusted from pursuing fast growth to enhancing quality development and profitability."
As for profitability, it flipped rather dramatically into the black. The company posted a net profit of nearly 105 million yuan ($16 million), against the year-ago quarter's loss of 370 million yuan ($55 million).
Very few analysts in the U.S., if any, currently track the China-based insurance company's stock, so outside estimates are hard to come by. Nevertheless, given the reaction of investors, it's clear they're expecting more out of Waterdrop's strategy shift.
NYSE: WDH
Key Data Points
Now what
Another possible reason for the investor dismay was Waterdrop's rather vague guidance. It said it should be profitable on a non-GAAP (adjusted) basis in full-year 2022, even as it invests actively in its current business and new activities. Drilling down some, the company added that on a quarter-over-quarter basis, the current second quarter should see higher net operating revenue.
It didn't provide more specific estimates or hesitate to mention that these are preliminary forecasts subject to change.
