Leerink Partners analyst Whit Mayo reiterated a Buy rating on Alignment Healthcare (ALHC – Research Report) on February 27 and set a price target of $9.00.
Whit Mayo has given his Buy rating due to a combination of factors including Alignment Healthcare’s (ALHC) solid performance in the fourth quarter, which demonstrated strong clinical capabilities and a focus on quality metrics, such as Medicare’s Stars program. Despite a challenging environment for Medicare Advantage (MA) plans, ALHC has been able to contain healthcare utilization trends and is on track to potentially reach a break-even status in 2024. The company’s strategic focus on growing membership and concentrating efforts in core markets, alongside expected operational leverage, underpins this positive outlook. This suggests a degree of insulation from broader sector issues, as ALHC leverages its operational efficiencies to mitigate risks.
Furthermore, ALHC’s unique clinical care model has consistently shown its effectiveness in managing healthcare trends, even as a smaller player in the market. This capability, evidenced by declining inpatient admissions and overall volumes, has helped the company to deliver results that align with expectations. Looking ahead to 2024, ALHC’s guidance for adjusted EBITDA reflects a cautious yet optimistic approach, with improvements in plan retention and member acquisition indicating potential for better gross margins. Mayo’s projection of decreasing medical margin per member per month, excluding ACO Reach impacts, is balanced by the significant operational leverage anticipated, reinforcing the Buy rating for ALHC’s stock.
In another report released yesterday, TD Cowen also assigned a Buy rating to the stock with a $8.00 price target.
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Alignment Healthcare (ALHC) Company Description:
Alignment Healthcare Inc is a next-generation, consumer-centric platform that is revolutionizing the healthcare experience for seniors through Medicare Advantage plans. These plans are marketed and sold direct-to-consumer, allowing seniors to select the manner in which they receive healthcare coverage and services on an annual basis.
Read More on ALHC:
- Alignment Healthcare reports Q4 EPS (25c), consensus (22c)
- Alignment Healthcare Reports Fourth Quarter and Full-Year 2023 Results; Provides Full-Year 2024 Financial Guidance
- ALHC Earnings Report this Week: Is It a Buy, Ahead of Earnings?
- Alignment Healthcare to Announce Fourth Quarter and Full-Year 2023 Financial Results and Host Conference Call Tuesday, Feb. 27, 2024
- Alignment Healthcare price target lowered to $8.50 from $10.50 at Stephens
