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Alignment Healthcare (ALHC)
NASDAQ:ALHC
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Alignment Healthcare
(NASDAQ:ALHC)
Rating:51Neutral
Price Target:
$15.50
▲( 7.04% Upside)
Positive Factors
Competitive Positioning
ALHC's price target is raised to $17, indicating confidence in its future growth and competitive positioning.
Financial Performance
Alignment Healthcare reported positive first quarter 2025 results across the board—highlighted by a material adjusted EBITDA beat—and increased 2025 guidance for every key operating and financial metric.
Growth Potential
Total membership increased by 32%, indicating strong growth potential for ALHC.
Negative Factors
Investor Sentiment
Investors remain somewhat cautious on managed care names following the first-quarter earnings cycle, especially given recent hiccups at larger-cap MA plans.
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
$2.86B
Dividend YieldN/A
Average Volume (3M)3.49M
Price to Earnings (P/E)―
Beta (1Y)0.08
Revenue Growth49.12%
EPS Growth43.50%
CountryUS
Employees1,679
SectorHealthcare
Sector Strength40
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)-0.05
Shares Outstanding197,843,350
10 Day Avg. Volume3,361,415
30 Day Avg. Volume3,488,324
Financial Highlights & Ratios
PEG Ratio-1.14
Price to Book (P/B)28.15
Price to Sales (P/S)0.00
P/FCF Ratio162.91
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.33Price Target Upside26.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Alignment Healthcare Business Overview & Revenue Model
Company DescriptionAlignment Healthcare (ALHC) is a healthcare company focused on providing customized care and health management services for seniors. Operating within the healthcare sector, the company primarily offers Medicare Advantage plans that aim to enhance the overall health outcomes and experiences of its members. Alignment Healthcare leverages technology and data analytics to deliver personalized care solutions through its platforms and network of healthcare providers.
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 is on a positive growth path with increasing revenues, yet it faces challenges in achieving profitability. The company shows operational improvements but continues to report net losses. The balance sheet is stable with low leverage, though equity levels are modest. Cash flow improvements are notable, reflecting better cash management, 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 | ||||
| 3.00B | 2.70B | 1.82B | 1.43B | 1.17B | 959.22M | Gross Profit |
| 347.34M | 296.69M | 201.03M | 184.28M | 128.73M | 166.23M | EBIT |
| -65.84M | -101.56M | -127.82M | -128.64M | -178.07M | -6.00M | EBITDA |
| -40.24M | -77.59M | -105.30M | -113.53M | -161.81M | 9.47M | Net Income Common Stockholders |
| -90.63M | -128.03M | -148.02M | -149.64M | -212.96M | -39.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 301.71M | 470.65M | 318.82M | 409.55M | 466.60M | 207.31M | Total Assets |
| 633.23M | 782.06M | 591.88M | 633.86M | 630.89M | 338.50M | Total Debt |
| 170.47M | 329.26M | 170.79M | 164.60M | 157.59M | 154.44M | Net Debt |
| -70.61M | -103.60M | -32.12M | -244.95M | -309.00M | -52.87M | Total Liabilities |
| 501.21M | 681.11M | 433.81M | 394.56M | 324.84M | 307.89M | Stockholders Equity |
| 130.93M | 99.85M | 156.95M | 238.13M | 306.04M | 30.61M |
| Cash Flow | Free Cash Flow | ||||
| 19.07M | -6.65M | -95.18M | -69.20M | -97.14M | -8.15M | Operating Cash Flow |
| 57.62M | 34.77M | -59.19M | -45.43M | -78.78M | 7.56M | Investing Cash Flow |
| -6.98M | 39.19M | -147.26M | -28.22M | -20.82M | -16.36M | Financing Cash Flow |
| 156.56M | 156.03M | 105.00K | 16.59M | 360.13M | 130.12M |
Alignment Healthcare Technical Analysis
Negative
14.48
Price Trends
17.09
Negative
15.63
Negative
13.32
Positive
Market Momentum
-0.64
Positive
37.35
Neutral
41.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALHC, the sentiment is Negative. The current price of 14.48 is below the 20-day moving average (MA) of 15.66, below the 50-day MA of 17.09, and above the 200-day MA of 13.32, indicating a neutral trend. The MACD of -0.64 indicates Positive momentum. The RSI at 37.35 is Neutral, neither overbought nor oversold. The STOCH value of 41.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 3 New Risks
1.
Conversion of our convertible notes may dilute the percentage of ownership of our stockholders and could negatively impact the trading prices of our common stock. Q4, 2024
2.
Our outstanding convertible notes may impact the trading price of our common stock. Q4, 2024
3.
We may not have the ability to raise the funds necessary to settle conversions of our convertible notes, repurchase our convertible notes upon a fundamental change, or repay our convertible notes in cash at their maturity, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of our convertible notes. Q4, 2024
Alignment Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.61B | 50.86 | 10.43% | ― | 54.26% | ― | |
77 Outperform | $28.07B | 8.40 | 12.59% | ― | 8.85% | 33.30% | |
76 Outperform | $16.54B | 14.74 | 26.72% | ― | 16.71% | 12.23% | |
67 Neutral | $27.15B | 15.90 | 10.09% | 1.57% | 10.09% | -12.18% | |
53 Neutral | $5.14B | 3.23 | -45.01% | 2.85% | 17.55% | -0.69% | |
51 Neutral | $2.86B | ― | -75.82% | ― | 49.12% | 43.50% | |
50 Neutral | $1.62B | ― | -7.75% | ― | -32.45% | 80.24% |
* Healthcare Sector Average
Performance Comparison
ALHC
Alignment Healthcare
14.48
7.07
95.41%
CNC
Centene
56.41
-16.31
-22.43%
HUM
Humana
224.93
-120.12
-34.81%
MOH
Molina Healthcare
305.23
-18.86
-5.82%
CLOV
Clover Health Investments
3.19
2.18
215.84%
OSCR
Oscar Health
14.17
-6.25
-30.61%
Alignment Healthcare Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -13.66%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
Alignment Healthcare demonstrated strong financial performance with significant revenue, membership growth, and margin expansion. The company raised its guidance across all key metrics, indicating confidence in its future performance. However, there are concerns about potential Part D MBR increases and leadership transition challenges. Despite these, the overall outlook remains positive.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue for Q1 2025 was $927 million, representing a 47% year-over-year growth, surpassing the high-end of guidance.
Health Plan Membership Increase
Health plan membership grew to 217,500, reflecting approximately 32% growth year-over-year.
Margin Expansion and EBITDA Performance
Adjusted gross profit of $107 million grew 87% year-over-year, with a consolidated MBR of 88.4% improving by 250 basis points. Adjusted EBITDA was $20 million, resulting in a 410 basis point margin expansion year-over-year.
Guidance Increase
The company raised the midpoint of its guidance ranges across its four key metrics, reflecting strong growth momentum and performance.
Strategic Leadership Transition
Jim Head will succeed Thomas Freeman as CFO, bringing over 30 years of experience, as Thomas transitions to a Strategic Advisor role.
Negative Updates
Potential Part D MBR Increase
The company anticipates Part D MBR to be slightly higher in the subsequent quarters, indicating potential reversal of early favorability seen in Q1.
CFO Transition
Thomas Freeman announced his decision to step down as CFO, which could imply transitional challenges during the leadership change.
Company Guidance
During Alignment Healthcare's First Quarter 2025 Earnings Conference Call, the company reported surpassing the high-end of guidance for its four key metrics. Health plan membership grew by 32% year-over-year to 217,500 members, driving a 47% increase in total revenue to $927 million. Adjusted gross profit rose by 87% to $107 million, resulting in a consolidated Medical Benefit Ratio (MBR) of 88.4%, a 250 basis point improvement. Adjusted EBITDA reached $20 million, marking a 410 basis point margin expansion from the previous year. The company also highlighted its successful scale-up in ex-California markets, doubling membership there. Based on these strong results, Alignment Healthcare raised the midpoint of its guidance ranges across key metrics for the full year 2025, projecting health plan membership between 228,000 and 233,000, revenue between $3.77 billion and $3.815 billion, adjusted gross profit between $420 million and $445 million, and adjusted EBITDA between $38 million and $60 million.Alignment Healthcare Corporate Events
Executive/Board Changes
Alignment Healthcare’s Chief Experience Officer Resigns
Neutral
Apr 15, 2025
On April 9, 2025, Hakan Kardes, the Chief Experience Officer of Alignment Healthcare, resigned to pursue other professional opportunities. His resignation was effective immediately, but he will remain with the company until May 16, 2025, to assist in transitioning his duties to other senior employees.
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.