What happened
Waterdrop (WDH 0.84%) 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.
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.
