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Alignment Healthcare (ALHC)
NASDAQ:ALHC
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Alignment Healthcare
(NASDAQ:ALHC)
Rating:55Neutral
Price Target:
$15.50
▲(3.75%Upside)
Positive Factors
Earnings
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.
Financial Performance
ALHC handily beat revenue and EBITDA estimates and raised 2025 guidance above expectations.
Membership Growth
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 Change
CFO Thomas Freeman stepping down is seen as a loss but not a red flag for the company.
Alignment Healthcare (ALHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.96B
Dividend YieldN/A
Average Volume (3M)2.88M
Price to Earnings (P/E)―
Beta (1Y)0.09
Revenue Growth49.12%
EPS Growth43.50%
CountryUS
Employees1,679
SectorHealthcare
Sector Strength55
IndustryMedical - Healthcare Plans
Share Statistics
EPS (TTM)-0.05
Shares Outstanding197,843,350
10 Day Avg. Volume2,697,001
30 Day Avg. Volume2,876,905
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)8.95
Price to Sales (P/S)0.00
P/FCF Ratio-30.80
Enterprise Value/Market Cap0.64
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit5.43
Enterprise Value/Ebitda-5.91
Forecast
1Y Price Target
$18.43Price Target Upside23.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
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 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:May 01, 2025
(Q1-2025)
| % Change Since: -10.91%|
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 Financial Statement Overview
Summary
Alignment Healthcare shows strong revenue growth and operational efficiency improvements with a 38.9% gross profit margin. However, the company faces challenges in achieving profitability, operating at a net loss with negative EBIT and EBITDA margins. The balance sheet is stable with low leverage, though equity levels are modest. Cash flow improvements are notable, reflecting better cash management.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 | ||||
| 479.54M | 470.65M | 318.82M | 409.55M | 466.60M | 207.31M |
| Total Assets | |||||
| 895.62M | 782.06M | 591.88M | 633.86M | 630.89M | 338.50M |
| Total Debt | |||||
| 7.65M | 329.26M | 170.79M | 164.60M | 157.59M | 154.44M |
| Net Debt | |||||
| -438.54M | -103.60M | -32.12M | -244.95M | -309.00M | -52.87M |
| Total Liabilities | |||||
| 786.62M | 681.11M | 433.81M | 394.56M | 324.84M | 307.89M |
| Stockholders Equity | |||||
| 108.13M | 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
14.94
Price Trends
16.43
Negative
15.97
Negative
13.76
Positive
Market Momentum
-0.28
Negative
45.30
Neutral
58.19
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 14.94 is below the 20-day moving average (MA) of 15.16, below the 50-day MA of 16.43, and above the 200-day MA of 13.76, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 58.19 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 0 New Risks
Alignment Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $27.48B | 8.22 | 12.59% | ― | 8.85% | 33.30% | |
76 Outperform | $16.16B | 14.40 | 26.72% | ― | 16.71% | 12.23% | |
72 Outperform | $28.39B | 16.63 | 10.09% | 1.50% | 10.09% | -12.18% | |
71 Outperform | $3.55B | 50.07 | 10.43% | ― | 54.26% | ― | |
55 Neutral | $2.96B | ― | -75.82% | ― | 49.12% | 43.50% | |
54 Neutral | $5.34B | 3.27 | -45.10% | 3.30% | 16.80% | 0.02% | |
50 Neutral | $1.47B | ― | -7.75% | ― | -32.45% | 80.24% |
* Healthcare Sector Average
Performance Comparison
ALHC
Alignment Healthcare
14.50
6.60
83.54%
CNC
Centene
54.68
-13.52
-19.82%
HUM
Humana
235.39
-115.63
-32.94%
MOH
Molina Healthcare
290.25
-17.83
-5.79%
CLOV
Clover Health Investments
2.92
1.77
153.91%
OSCR
Oscar Health
14.95
-3.85
-20.48%
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.
The most recent analyst rating on (ALHC) stock is a Buy with a $19.00 price target. To see the full list of analyst forecasts on Alignment Healthcare stock, see the ALHC Stock Forecast page.
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
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.