Alignment Healthcare, Inc. (NASDAQ:ALHC) Receives Average Recommendation of "Moderate Buy" from Brokerages

Key Points

• Analysts maintain a “Moderate Buy” consensus on Alignment Healthcare, with seven buy ratings and four holds among 11 firms. The average 12-month price target is $23.60.
• Alignment reported better-than-expected quarterly results, with EPS of $0.17 versus a $0.13 consensus and revenue of $1.34 billion, up 31.6% year over year.
• The stock opened at $10.37, near its 12-month low, amid concerns about Medicare Advantage star ratings, multiple securities investigations and significant insider selling, including $4.9 million by the CEO under a pre-arranged plan.

Alignment Healthcare, Inc. (NASDAQ:ALHC - Get Free Report) has earned an average rating of "Moderate Buy" from the eleven research firms that are presently covering the company, Marketbeat Ratings reports. Four equities research analysts have rated the stock with a hold recommendation and seven have given a buy recommendation to the company. The average 12-month target price among brokers that have issued ratings on the stock in the last year is $23.60.

Several equities analysts have recently commented on the stock. Zacks Research downgraded shares of Alignment Healthcare from a "strong-buy" rating to a "hold" rating in a report on Monday, July 6th. Barclays cut their target price on shares of Alignment Healthcare from $19.00 to $16.00 and set an "equal weight" rating for the company in a research note on Tuesday, May 26th. UBS Group reiterated a "neutral" rating on shares of Alignment Healthcare in a research note on Wednesday, July 8th. Raymond James Financial cut shares of Alignment Healthcare from a "strong-buy" rating to an "outperform" rating and decreased their price target for the stock from $22.00 to $19.00 in a research note on Monday, August 3rd. Finally, TD Cowen reissued a "buy" rating on shares of Alignment Healthcare in a report on Monday, August 3rd.

Alignment Healthcare News Summary

Here are the key news stories impacting Alignment Healthcare this week:

• Neutral Sentiment: Unusual options activity provided a potentially bullish—but highly speculative—signal: investors purchased 19,456 ALHC call options, roughly 996% above the average daily volume of 1,775 contracts. Options activity alone does not confirm a change in the company’s outlook.
• Negative Sentiment: Reports from the Baird conference said Alignment’s shares fell after comments concerning Medicare Advantage star ratings. The lack of clear reassurance or detail appears to have increased concerns about the company’s future reimbursement, enrollment and profitability prospects. Alignment falls after comments at Baird investor conference
• Negative Sentiment: Rosen Law Firm announced an investigation into potential securities claims, alleging that Alignment may have issued materially misleading business information. While the announcement does not establish wrongdoing, it adds litigation and reputational risk. Rosen Law Firm investigation
• Negative Sentiment: Kaplan Fox separately reported an investigation into potential securities-law violations, reinforcing investor concerns following the conference disclosures. Kaplan Fox investigation
• Negative Sentiment: A recent SEC filing showed an Alignment insider sold approximately $7.1 million of stock, including a reported $4.9 million sale by the CEO. Insider selling is not necessarily evidence of trouble, but the transactions may further weigh on sentiment. Alignment Healthcare insider stock sale

Alignment Healthcare Stock Down 19.9%

Shares of ALHC opened at $10.37 on Wednesday. The business's 50 day moving average is $15.66 and its 200 day moving average is $17.90. The company has a market capitalization of $2.15 billion, a PE ratio of 54.58 and a beta of 1.11. Alignment Healthcare has a 12-month low of $9.94 and a 12-month high of $25.12. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 1.22.

Alignment Healthcare (NASDAQ:ALHC - Get Free Report) last posted its quarterly earnings results on Thursday, July 30th. The company reported $0.17 EPS for the quarter, topping analysts' consensus estimates of $0.13 by $0.04. Alignment Healthcare had a return on equity of 20.02% and a net margin of 0.89%.The company had revenue of $1.34 billion for the quarter, compared to analysts' expectations of $1.31 billion. During the same period in the previous year, the firm earned $0.07 EPS. The firm's revenue was up 31.6% compared to the same quarter last year. Research analysts expect that Alignment Healthcare will post 0.17 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, CEO John Kao sold 385,270 shares of the stock in a transaction that occurred on Friday, September 11th. The stock was sold at an average price of $12.68, for a total transaction of $4,885,223.60. Following the completion of the transaction, the chief executive officer directly owned 1,223,473 shares of the company's stock, valued at approximately $15,513,637.64. This represents a 23.95% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, President Dawn Maroney sold 122,707 shares of the firm's stock in a transaction that occurred on Friday, September 11th. The shares were sold at an average price of $12.68, for a total value of $1,555,924.76. Following the transaction, the president owned 794,606 shares of the company's stock, valued at $10,075,604.08. This represents a 13.38% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 1,326,577 shares of company stock worth $19,907,564. Corporate insiders own 5.20% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of the business. WINTON GROUP Ltd purchased a new position in shares of Alignment Healthcare in the 2nd quarter worth approximately $1,164,000. Arizona State Retirement System raised its holdings in Alignment Healthcare by 15.8% during the 2nd quarter. Arizona State Retirement System now owns 53,553 shares of the company's stock valued at $1,275,000 after buying an additional 7,318 shares during the period. Nykredit A S purchased a new stake in Alignment Healthcare during the 2nd quarter valued at $36,000. Corient Private Wealth LP lifted its position in Alignment Healthcare by 128.2% in the second quarter. Corient Private Wealth LP now owns 136,505 shares of the company's stock worth $3,250,000 after buying an additional 76,677 shares during the last quarter. Finally, HighTower Advisors LLC bought a new stake in Alignment Healthcare in the second quarter worth $755,000. 86.19% of the stock is owned by hedge funds and other institutional investors.

Alignment Healthcare Company Profile

Alignment Healthcare, Inc is a technology-enabled healthcare company that provides Medicare Advantage health plans and care-management services for older adults. Through its Alignment Health Plan subsidiary, the company offers insurance coverage designed for Medicare-eligible members, including primary and specialty care coordination, prescription drug benefits, preventive services and access to a network of healthcare providers.

The company combines health-plan operations with proprietary technology intended to support personalized care.

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