ALHC - Alignment Healthcare: A First Assessment

2024-04-28 04:56:28 ET

Summary

• Medicare Advantage provider Alignment Healthcare is struggling to achieve profitability, with shares down over 80% from their 2021 all-time high.
• However, the company did see a surge in membership during the annual enrollment period, with a 44% year-over-year increase.
• Management is forecasting breakeven FY24 Adj. EBITDA as it realizes economies of scale and maintains lower utilization rates than the industry.
• A full investment analysis of Alignment Healthcare follows in the paragraphs below.

Shares of Medicare Advantage provider Alignment Healthcare, Inc. ( ALHC ) are down over 80% from their 2021 all-time highs as it struggles to achieve profitability. However, after an annual enrollment period that saw membership surge 44% year-over-year, management is forecasting breakeven FY24 Adj. EBITDA as it realizes SG&A economies of scale. With the insurer maintaining much lower utilization rates than the industry and outshining its competition on a Stars basis, the recent insider buying into this busted IPO merited a deeper dive. An analysis follows below....

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