EU and US could reach trade deal this weekend - Reuters
On Tuesday, Stifel analysts adjusted their outlook on Alignment Healthcare Inc (NASDAQ:ALHC), lifting the price target to $23.00 from the previous $18.00 while sustaining a Buy rating on the stock. The company's stock, currently trading at $20.30, has demonstrated remarkable momentum with a 271% return over the past year and is trading near its 52-week high. According to InvestingPro data, the company has shown strong growth with revenue increasing by 48% in the last twelve months. The revision follows the Centers for Medicare & Medicaid Services' (CMS) release of its Final Rate Notice for 2026, which exceeded market expectations by announcing rates 283 basis points higher than the Advance Rate Notice issued in January.
The CMS's Final Rate Notice, which includes data from the fourth quarter of 2024, was notably above the anticipated increase of 50-100 basis points. According to Stifel analysts, Alignment Healthcare has successfully gained market share over the last two Annual Enrollment Periods (AEPs), benefitting from the challenges faced by competitors. InvestingPro subscribers can access 10+ additional exclusive tips about ALHC's performance and comprehensive analysis in the Pro Research Report, which provides deep insights into the company's competitive position and growth trajectory. These competitors have experienced downgrades in star ratings, margin compression, and have had to reduce benefits and member counts to protect their margins.
With the higher rates set for 2026, competitors are now more likely to maintain or even enhance benefits, which could lead to a more competitive environment for member acquisition. Stifel anticipates that this may result in more challenging member growth for Alignment Healthcare compared to the growth seen in 2024 and 2025.
In light of these developments, Stifel has revised its 2026 estimates for Alignment Healthcare. The firm now projects slightly slower member growth, which is expected to be balanced by increased per member per month (PMPM) rates and a quicker expansion of EBITDA margins. With a current market capitalization of $3.89 billion and its next earnings report due on May 1, 2025, investors will be watching closely to see if the company can improve upon its current EBITDA of -$71.41 million. Consequently, Stifel has raised its forecast for the company's 2026 EBITDA from $103 million to $123 million, prompting the increase in the price target for Alignment Healthcare shares.
In other recent news, Alignment Healthcare Inc. reported its fourth-quarter 2024 earnings, surpassing analysts' expectations with an EPS of -0.16, compared to the forecast of -0.18. The company's revenue also exceeded projections, reaching $701.2 million against the expected $674.97 million. Following the earnings announcement, Alignment Healthcare provided guidance for 2025, forecasting revenue between $3.72 billion and $3.78 billion, marking a 40% year-over-year growth at the midpoint. Adjusted gross profit is expected to range from $415 million to $445 million. Additionally, Stifel analysts raised their price target for Alignment Healthcare to $23.00, citing a higher-than-expected CMS rate increase for 2026 as a positive factor. Piper Sandler also adjusted its outlook, increasing the price target to $21.00, highlighting the company's "flywheel" approach as a key driver for success. Raymond (NSE:RYMD) James lifted its price target to $19.00, noting Alignment Healthcare's robust fourth-quarter performance, which included a 59% membership growth and a 51% increase in top-line growth. These developments reflect investor confidence in Alignment Healthcare's ability to sustain growth and profitability.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.