Bright Health Group shares fell about 12% on Wednesday after the company's latest financial results came up short of analyst estimates.
The Bloomington-based health insurer said that, despite the earnings miss, it was largely holding steady with financial projections for the year. Executives said they made progress on resolving previously disclosed problems with claims processing and calculating risk adjustment payments.
Bright Health went public during summer 2021 in Minnesota's largest-ever initial public offering of stock. At its IPO, Bright Health's stock initially priced at $18, but shares on Wednesday closed at $1.71.
Executives told investors during a conference call on quarterly results that the company now is actively working to secure additional financing. "We've always planned for more capital and we are well underway in satisfying this need," CEO Mike Mikan said on the call.
He added that, because of improving performance and cost reductions, Bright Health is on track to reach a break-even point in its adjusted operating profit in 2024.
Revenue and operating costs during the latest quarter were hurt by one-time items, including a payment related to the risk adjustment issue, Kevin Fischbeck, an analyst with Bank of America, wrote to investors on Wednesday.
"Overall despite noise in the quarter, it was less volatile than results in 2021," Fischbeck wrote.
He added in a second research note: "Although [first half of 2022] results have been solid (albeit noisy), the early stages of the turnaround, wide guidance range, and need to raise capital leave us seeing more upside at peers."