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Alignment Healthcare (ALHC)
NASDAQ:ALHC
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Alignment Healthcare
(NASDAQ:ALHC)
Rating:61Neutral
Price Target:
$16.00
▲(2.04% Upside)
Positive Factors
Financial Performance
ALHC reported 2Q adjusted EBITDA of $45.9 million, materially exceeding guidance and consensus expectations.
Growth Potential
Total membership increased by 32%, indicating strong growth potential for ALHC.
Market Share
ALHC is emerging as a better MA-VBC mousetrap, driving consistent improvement in hospital utilization and reinvesting savings back into member benefits, which supports market share gains and growth.
Negative Factors
Leadership Changes
CFO Thomas Freeman stepping down is seen as a loss but not a red flag for the company.
Market Reaction
Shares traded off given the announced CFO transition and nominal guidance increase.
Alignment Healthcare (ALHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.09B
Dividend YieldN/A
Average Volume (3M)3.60M
Price to Earnings (P/E)―
Beta (1Y)0.18
Revenue Growth49.46%
EPS Growth66.89%
CountryUS
Employees1,679
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)0.07
Shares Outstanding198,031,420
10 Day Avg. Volume3,095,052
30 Day Avg. Volume3,595,832
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)21.50
Price to Sales (P/S)0.79
P/FCF Ratio-322.87
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit8.06
Enterprise Value/Ebitda2.12K
Forecast
1Y Price Target
$17.33Price Target Upside10.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Alignment Healthcare Business Overview & Revenue Model
Company DescriptionAlignment Healthcare (ALHC) is a healthcare company operating primarily in the Medicare Advantage sector. It focuses on providing tailored healthcare solutions that prioritize quality and accessibility for seniors. The company offers a range of services including healthcare plans, personalized care coordination, and technology-driven health management solutions designed to improve patient outcomes and enhance the overall healthcare experience.
How the Company Makes MoneyAlignment Healthcare makes money primarily through its Medicare Advantage plans. These plans are offered to eligible seniors and are funded by the federal government's Medicare program. The company generates revenue by receiving per-member-per-month payments from the Centers for Medicare & Medicaid Services (CMS) based on the number of enrolled members in its plans. These payments are risk-adjusted, meaning they vary based on the health status and specific needs of the members. Additionally, Alignment Healthcare may earn revenue through partnerships with healthcare providers and by offering supplemental insurance plans or enhanced services that members can opt into for additional fees. The company's focus on technology and analytics also helps in managing costs efficiently and optimizing patient care, contributing to its financial performance.
Alignment Healthcare Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong performance with significant growth in membership and revenue, improved profitability metrics, and increased guidance for the year. There are some concerns regarding Part D margin pressures and expected reversal of SG&A benefits, but overall, the positive aspects significantly outweigh the challenges.Q2-2025 Updates
Positive Updates
Strong Membership and Revenue Growth
Health plan membership grew by approximately 28% year-over-year to 223,700 members, supporting a total revenue increase of approximately 49% year-over-year, reaching $1 billion.
Significant Improvement in Adjusted EBITDA and Margin
Adjusted EBITDA was $46 million, surpassing the high end of the guidance range and producing an adjusted EBITDA margin of 4.5%, generating 360 basis points of margin expansion year-over-year.
Improved Medical Benefit Ratio (MBR)
Consolidated MBR improved by 200 basis points to 86.7% year-over-year.
SG&A Ratio Improvement
Adjusted SG&A ratio improved by 160 basis points year-over-year to 8.8%.
Raised Full Year Guidance
Full year revenue guidance increased, now expecting approximately 44% growth year-over-year, with adjusted gross profit guidance raised by $28 million.
Positive Cash Position
Ended the second quarter with $504 million in cash, cash equivalents, and investments, expecting to be free cash flow positive in 2025.
Stars Rating Improvement and Strategic Positioning
Arizona HMO contract revised from 3.5 to 4 stars for payment year 2026, with 100% of members in a plan receiving 4 stars or above.
Negative Updates
Challenges in Part D Margins
Part D gross margin faced pressures due to higher trends in gross drug costs and utilization in non-low-income populations.
SG&A Timing Benefit Reversal Expected
SG&A included a $6 million timing benefit, expected to reverse in the second half, leaving full year expectations for SG&A unchanged.
Fourth Quarter MBR and Utilization Concerns
Fourth quarter MBR expected to be higher due to normal seasonality and changes in Part D seasonality due to the Inflation Reduction Act.
Company Guidance
During Alignment Healthcare's Second Quarter 2025 Earnings Conference Call, the company exceeded the high end of its guidance metrics for the second quarter in a row. Health plan membership grew by approximately 28% year-over-year to 223,700 members, supporting a total revenue increase of 49% to $1 billion. Adjusted gross profit rose by 76% to $135 million, resulting in a consolidated Medical Benefit Ratio (MBR) of 86.7%, an improvement of 200 basis points year-over-year. The adjusted Selling, General, and Administrative (SG&A) ratio improved by 160 basis points to 8.8%. Adjusted EBITDA reached $46 million, significantly surpassing the guidance range of $10 million to $18 million and achieving an adjusted EBITDA margin of 4.5%, a 360 basis points expansion year-over-year. For the first half of 2025, the company's MBR improved by 230 basis points to 87.5%, and the adjusted EBITDA margin increased by 390 basis points to 3.4%. The first half adjusted EBITDA of $66 million exceeded the initial full-year guidance range of $35 million to $60 million. Consequently, the company raised its guidance ranges across key metrics, forecasting full-year 2025 health plan membership to be between 229,000 and 234,000 members, revenue between $3.885 billion and $3.910 billion, adjusted gross profit between $452 million and $469 million, and adjusted EBITDA between $69 million and $83 million.Alignment Healthcare Financial Statement Overview
Summary
Alignment Healthcare shows positive revenue growth and operational efficiency improvements, but struggles with profitability due to net losses and negative EBIT and EBITDA margins. The balance sheet is stable with low leverage, yet equity levels are modest. Cash flow improvements are notable but consistent profitability remains a challenge.Income Statement
Alignment Healthcare's revenue shows a strong growth trajectory, with a TTM revenue increase of 11% from the previous year. However, the company continues to operate at a net loss, reflected in negative EBIT and EBITDA margins, indicating challenges in achieving profitability. The gross profit margin has improved significantly, reaching 38.9% TTM, which demonstrates some operational efficiency improvements.45
Neutral
Balance Sheet
The company's balance sheet shows a relatively low debt-to-equity ratio of 0.07 TTM, indicating conservative leverage. However, the equity ratio is only 12.1%, suggesting limited equity financing. The return on equity remains negative due to net losses, impacting overall financial stability.50
Neutral
Cash Flow
Positive trends are seen in cash flow, with a positive operating cash flow TTM and a significant improvement in free cash flow. The operating cash flow to net income ratio is positive, indicating better cash generation relative to net income. However, the free cash flow growth rate is not calculable due to negative previous free cash flow.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.34B | 2.70B | 1.82B | 1.43B | 1.17B | 959.22M |
| Gross Profit | 404.91M | 296.69M | 201.03M | 184.28M | 128.73M | 166.23M |
| EBITDA | 1.54M | -77.44M | -105.30M | -113.53M | -161.81M | 9.47M |
| Net Income | -50.95M | -128.03M | -148.02M | -149.55M | -195.29M | -22.93M |
Balance Sheet | ||||||
| Total Assets | 1.00B | 782.06M | 591.88M | 633.86M | 630.89M | 338.50M |
| Cash, Cash Equivalents and Short-Term Investments | 503.78M | 470.65M | 318.82M | 409.55M | 466.60M | 207.31M |
| Total Debt | 329.66M | 329.26M | 170.79M | 164.60M | 157.59M | 154.44M |
| Total Liabilities | 859.18M | 681.11M | 433.81M | 394.56M | 324.84M | 307.89M |
| Stockholders Equity | 140.97M | 99.85M | 156.95M | 238.13M | 306.04M | 30.61M |
Cash Flow | ||||||
| Free Cash Flow | 28.41M | -6.65M | -95.18M | -69.20M | -97.14M | -8.15M |
| Operating Cash Flow | 63.23M | 34.77M | -59.19M | -45.43M | -78.78M | 7.56M |
| Investing Cash Flow | -40.61M | 39.19M | -147.26M | -28.22M | -20.82M | -16.36M |
| Financing Cash Flow | 108.67M | 156.03M | 105.00K | 16.59M | 360.13M | 130.12M |
Alignment Healthcare Technical Analysis
Positive
15.68
Price Trends
13.81
Positive
15.12
Positive
14.47
Positive
Market Momentum
0.61
Negative
65.94
Neutral
65.05
Neutral
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 15.68 is above the 20-day moving average (MA) of 14.54, above the 50-day MA of 13.81, and above the 200-day MA of 14.47, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 65.94 is Neutral, neither overbought nor oversold. The STOCH value of 65.05 is Neutral, 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $35.95B | 22.81 | 9.03% | 1.18% | 9.88% | -7.25% | |
70 Outperform | $9.49B | 8.64 | 23.93% | ― | 16.12% | 10.99% | |
68 Neutral | $4.26B | 49.61 | -14.04% | ― | 48.29% | -1436.25% | |
63 Neutral | $14.28B | 7.19 | 7.50% | ― | 12.96% | -23.25% | |
61 Neutral | $3.09B | ― | -38.50% | ― | 49.46% | 66.89% | |
51 Neutral | $7.83B | -0.15 | -40.10% | 2.29% | 21.46% | -2.01% | |
50 Neutral | $1.37B | ― | -12.59% | ― | -4.87% | 66.16% |
* Healthcare Sector Average
Performance Comparison
ALHC
Alignment Healthcare
15.68
6.84
77.38%
CNC
Centene
28.66
-49.51
-63.34%
HUM
Humana
298.87
-48.93
-14.07%
MOH
Molina Healthcare
174.78
-177.64
-50.41%
CLOV
Clover Health Investments
2.67
-0.43
-13.87%
OSCR
Oscar Health
17.08
-0.19
-1.10%
Alignment Healthcare Corporate Events
Executive/Board ChangesShareholder Meetings
Alignment Healthcare Holds Annual Stockholder Meeting
Positive
Jun 11, 2025
At the annual meeting held on June 5, 2025, Alignment Healthcare‘s stockholders voted on several key proposals. Three Class I directors were elected to serve until 2028, Deloitte & Touche LLP’s appointment as the accounting firm for 2025 was ratified, and the executive compensation plan was approved, reflecting confidence in the company’s leadership and strategic direction.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.