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Alignment Healthcare (ALHC)
NASDAQ:ALHC
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Alignment Healthcare
(NASDAQ:ALHC)
61Neutral
Positive Factors
Earnings and Profitability
ALHC reported its first year of adjusted EBITDA profitability, illustrating the effectiveness of its clinical care model.
Financial Performance
ALHC had a markedly stronger quarter than most of its peers, beating on Adjusted MLR by ~150bps in the quarter versus its own 4Q guidance and consensus.
Growth Expectations
ALHC is expected to capture 20% top-line growth while balancing margin expansion, driven by maturing cohorts and future tailwinds.
Negative Factors
Market Competition
Despite ex-California markets growing faster, ALHC expects California to drive over 50% of total net member growth due to recent success.
Utilization and Costs
The company is overcoming MLR pressures despite assuming higher utilization in 2025 and absorbing higher membership growth, creating $600m of gross profit opportunity.
Alignment Healthcare (ALHC) vs. S&P 500 (SPY)
Market Cap
$3.51B
Dividend YieldN/A
Average Volume (3M)2.53M
Price to Earnings (P/E)―
Beta (1Y)-0.09
Revenue Growth48.25%
EPS Growth15.42%
CountryUS
Employees1,679
SectorHealthcare
Sector Strength72
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)-0.67
Shares Outstanding191,832,340
10 Day Avg. Volume2,503,160
30 Day Avg. Volume2,528,667
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.25
Price to Cash Flow (P/CF)-97.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.94Price Target Upside-7.43% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Alignment Healthcare Business Overview & Revenue Model
Company DescriptionAlignment Healthcare, Inc., a tech-enabled Medicare advantage company, operates consumer-centric health care platform. It provides customized health care in the United States to seniors and those who need it through its Medicare advantage plans. The company owns Medicare advantage plans in the states of California, North Carolina, and Nevada. It also coordinates and provides covered health care services, including professional, institutional, and ancillary services to members enrolled in certain benefit plans of unaffiliated Medicare Advantage Health Maintenance Organizations. The company was founded in 2013 and is based in Orange, California.
How the Company Makes MoneyAlignment Healthcare makes money primarily through the provision of Medicare Advantage plans, which are offered to eligible seniors. These plans are funded by the U.S. government, and the company receives payments based on a capitation model. This means that Alignment Healthcare is paid a fixed amount per member per month to provide healthcare services. The company's revenue is largely dependent on its ability to manage the healthcare needs of its enrollees efficiently while maintaining high levels of member satisfaction. Furthermore, the company may engage in partnerships with healthcare providers and technology firms to enhance its service offerings and operational efficiency, contributing to its overall earnings.
Alignment Healthcare Financial Statement Overview
Summary
Alignment Healthcare demonstrates strong revenue growth but struggles with profitability due to persistent net losses and negative operating margins. The balance sheet shows decreased leverage, yet weak equity financing. Improved cash flow management is a positive sign, though historical cash flow volatility remains a risk.Income Statement
Alignment Healthcare has shown strong revenue growth, increasing from $959M in 2020 to $2.70B in 2024, indicating robust business expansion. However, the company has consistently posted net losses, though the net loss narrowed slightly from $148M in 2023 to $128M in 2024. Gross profit margin is high due to revenue equaling gross profit, but negative EBIT and EBITDA margins indicate operational inefficiencies.55
Neutral
Balance Sheet
The company's debt-to-equity ratio improved, dropping from 5.06 in 2019 to 0.08 in 2024, reflecting decreased leverage. However, the equity ratio fell to 12.76% in 2024, showing a decline in asset financing through equity. ROE remains negative due to consistent net losses, indicating challenges in generating returns for shareholders.48
Neutral
Cash Flow
Free cash flow improved from -$95.18M in 2023 to $34.77M in 2024, indicating better cash management. The operating cash flow to net income ratio is positive at 0.27, suggesting some efficiency in converting income to cash. However, the company has faced historical volatility in free cash flow generation.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.70B | 1.82B | 1.43B | 1.17B | 959.22M | Gross Profit |
| 296.69M | 201.03M | 184.28M | 128.73M | 166.23M | EBIT |
| -101.56M | -127.82M | -128.64M | -178.07M | -6.00M | EBITDA |
| -77.44M | -105.30M | -113.53M | -161.81M | 9.47M | Net Income Common Stockholders |
| -128.03M | -148.02M | -149.64M | -212.96M | -39.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 470.65M | 318.82M | 409.55M | 466.60M | 207.31M | Total Assets |
| 782.06M | 591.88M | 633.86M | 630.89M | 338.50M | Total Debt |
| 7.83M | 170.79M | 164.60M | 157.59M | 154.44M | Net Debt |
| -425.02M | -32.12M | -244.95M | -309.00M | -52.87M | Total Liabilities |
| 681.11M | 433.81M | 394.56M | 324.84M | 307.89M | Stockholders Equity |
| 99.85M | 156.95M | 238.13M | 306.04M | 30.61M |
| Cash Flow | Free Cash Flow | |||
| -6.65M | -95.18M | -69.20M | -97.14M | -8.15M | Operating Cash Flow |
| 34.77M | -59.19M | -45.43M | -78.78M | 7.56M | Investing Cash Flow |
| 39.19M | -147.26M | -28.22M | -20.82M | -16.36M | Financing Cash Flow |
| 156.03M | 105.00K | 16.59M | 360.13M | 130.12M |
Alignment Healthcare Technical Analysis
Positive
18.30
Price Trends
15.38
Positive
13.73
Positive
11.70
Positive
Market Momentum
0.97
Negative
77.48
Negative
93.83
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALHC, the sentiment is Positive. The current price of 18.3 is above the 20-day moving average (MA) of 16.58, above the 50-day MA of 15.38, and above the 200-day MA of 11.70, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 77.48 is Negative, neither overbought nor oversold. The STOCH value of 93.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALHC.
Alignment Healthcare Risk Analysis
Alignment Healthcare disclosed 66 risk factors in its most recent earnings report. Alignment Healthcare reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alignment Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $29.78B | 9.61 | 12.65% | ― | 5.89% | 27.09% | |
69 Neutral | $3.33B | ― | 2.80% | ― | 56.54% | ― | |
67 Neutral | $31.93B | 26.50 | 7.40% | 1.34% | 10.70% | -49.85% | |
65 Neutral | $472.03B | 33.28 | 15.88% | 1.58% | 8.35% | -35.14% | |
61 Neutral | $3.51B | ― | -99.72% | ― | 48.25% | 15.42% | |
49 Neutral | $6.85B | 0.81 | -52.91% | 2.50% | 17.48% | 1.17% | |
45 Neutral | $1.83B | ― | -14.75% | ― | -32.45% | 80.24% |
* Healthcare Sector Average
Performance Comparison
ALHC
Alignment Healthcare
18.30
13.37
271.20%
CNC
Centene
60.04
-17.71
-22.78%
HUM
Humana
264.58
-82.68
-23.81%
UNH
UnitedHealth
516.04
34.05
7.06%
CLOV
Clover Health Investments
3.59
2.82
366.23%
OSCR
Oscar Health
13.30
-1.39
-9.46%
Alignment Healthcare Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 35.86% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial and membership growth, with significant operational improvements and strategic positioning in star ratings. However, challenges related to managing new membership cohorts and regulatory changes were noted as potential concerns.Highlights
Impressive Membership Growth
Health plan membership grew by approximately 59% year-over-year, reaching 189,100 members by the end of 2024. This exceeded the initial guidance by more than 25,000 members and reflects a 21% growth relative to initial expectations.
Strong Financial Performance
Total revenue for Q4 2024 was $701 million, representing a 51% year-over-year growth and 61% growth excluding ACO REACH. For the full year, the total revenue was $2.7 billion, a 48% increase year-over-year.
Adjusted EBITDA Milestone
The company achieved positive adjusted EBITDA of $1 million in Q4 2024 and for the full year, marking its first year of adjusted EBITDA profitability as a public company.
Operational Efficiency
Adjusted SG&A as a percentage of revenue declined from 14.4% in 2023 to 11.1% in 2024, indicating a 330 basis point improvement due to scaled operations and elimination of one-time costs.
Strong AEP Results
The company entered 2025 with 209,900 health plan members, representing 35% growth year-over-year, with significant growth in ex-California markets.
Star Ratings Advantage
For the 2025 payment year, 95% of California members are in plans rated 4 stars or above, positioning the company well above competitors.
Lowlights
Challenges with New Memberships
Over 50% of members are in a year 1 or year 2 cohort, which may pose challenges in terms of profitability and managing medical expenses.
Inflation Reduction Act Impact
Changes related to the Inflation Reduction Act are expected to shift MBR seasonality, potentially affecting profitability in the second half of 2025.
V28 Risk Model Changes
The second phase-in of the V28 risk model presents a headwind, which might impact revenue and adjusted gross profit in 2025.
Company Guidance
In the fourth quarter of 2024, Alignment Healthcare experienced significant growth, surpassing initial membership guidance by over 25,000 members, leading to a total health plan membership of 189,100. This marked a 59% increase in membership and contributed to a total revenue of $701 million for the quarter, reflecting a 51% year-over-year growth and 61% growth excluding ACO REACH. The company's adjusted gross profit was $88 million, with a consolidated Medical Benefit Ratio (MBR) of 87.5%, showing a 200 basis point improvement from the previous year. This contributed to an adjusted EBITDA of $1 million and a 400 basis point margin expansion year-over-year. For the full year 2024, total revenue was $2.7 billion, growing 48% year-over-year, and the adjusted gross profit was $303 million, with an MBR of 88.8%. Looking ahead, the company provided guidance for 2025, expecting health plan membership to grow to between 227,000 and 233,000, with projected revenue of $3.72 billion to $3.78 billion. Adjusted gross profit is expected to be between $415 million and $445 million, and adjusted EBITDA is forecasted to range from $35 million to $60 million. The company highlighted its robust growth outside of California, with Nevada membership exceeding 10,000 and significant growth in other ex-California markets.Alignment Healthcare Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Alignment Healthcare Promotes Maroney Amidst Strong Membership Growth
Positive
Jan 13, 2025
Alignment Healthcare announced the promotion of Dawn Maroney to President, where she will oversee day-to-day operations, focusing on enhancing member experiences and ensuring seamless execution across markets. The company reported a significant 35% year-over-year growth in health plan membership to approximately 209,900 as of January 1, 2025, and projects membership to rise to 225,000-231,000 by year-end 2025. Alignment Healthcare reaffirmed its full-year 2024 financial guidance and expressed confidence in achieving a consensus adjusted EBITDA of $40 million in 2025. The company continues to expand its market reach and maintain high ratings for its plans, demonstrating robust growth and operational excellence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.