Alignment Healthcare (ALHC, Financial) announced its first-quarter revenue of $926.93 million, surpassing analysts' expectations of $888.26 million. This impressive performance demonstrates the effectiveness of ALHC's integrated model, which combines technology, clinical management, and member-first services. The company's focus on improving quality, clinical outcomes, and member experience contributed to its success across various key metrics.
Looking forward, ALHC is optimistic about continuing its growth trajectory. The company remains committed to expanding its operations with intent while fulfilling its mission to deliver exceptional Medicare Advantage services. The strong start to the year has provided a solid foundation for future progress.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Alignment Healthcare Inc (ALHC, Financial) is $17.88 with a high estimate of $22.00 and a low estimate of $9.00. The average target implies an upside of 6.59% from the current price of $16.77. More detailed estimate data can be found on the Alignment Healthcare Inc (ALHC) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Alignment Healthcare Inc's (ALHC, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alignment Healthcare Inc (ALHC, Financial) in one year is $18.92, suggesting a upside of 12.82% from the current price of $16.77. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alignment Healthcare Inc (ALHC) Summary page.
ALHC Key Business Developments
Release Date: February 27, 2025
- Health Plan Membership: 189,100 members, increased 59% year-over-year.
- Q4 2024 Revenue: $701 million, grew approximately 51% year-over-year.
- Full Year 2024 Revenue: $2.7 billion, 48% growth year-over-year.
- Adjusted Gross Profit (Q4 2024): $88 million, with a consolidated MBR of 87.5%.
- Adjusted Gross Profit (Full Year 2024): $303 million, MBR of 88.8%.
- Adjusted EBITDA (Q4 2024): Positive $1 million, 400 basis points margin expansion year-over-year.
- Adjusted EBITDA (Full Year 2024): Positive $1 million, 200 basis points margin expansion year-over-year.
- SG&A (Full Year 2024): $371 million, adjusted SG&A $301 million, 23% increase year-over-year.
- Cash and Investments: $471 million at year-end, including proceeds from convertible senior notes.
- 2025 Guidance - Revenue: $3.72 billion to $3.78 billion.
- 2025 Guidance - Adjusted Gross Profit: $415 million to $445 million.
- 2025 Guidance - Adjusted EBITDA: $35 million to $60 million.
- 2025 Guidance - Health Plan Membership: 227,000 to 233,000 members.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alignment Healthcare Inc (ALHC, Financial) achieved a 59% increase in health plan membership, surpassing initial guidance by over 25,000 members.
- Total revenue for the fourth quarter of 2024 grew by approximately 51% year-over-year, reaching $701 million.
- The company reported its first year of adjusted EBITDA profitability as a public company, with a positive adjusted EBITDA of $1 million.
- ALHC's ex-California markets experienced over 100% growth, with Nevada achieving over 10,000 members.
- The company is well-positioned for future growth, with 98% of members in plans rated 4 stars or above for the 2026 payment year, significantly outperforming the industry average.
Negative Points
- The company faces challenges from the second phase-in of the V28 risk model changes, which could impact margins.
- There is a modestly higher utilization volume expectation due to the mix of membership, which could affect profitability.
- ALHC's adjusted SG&A expenses increased by 23% year-over-year, which may impact operating leverage.
- The company anticipates changes in MBR seasonality due to the Inflation Reduction Act, potentially affecting financial performance.
- ALHC's growth strategy involves significant investment in clinical resources, which could increase operational costs.
