ALIGNMENT HEALTHCARE, INC. (ALHC): what the price requires

The current priced-in claim for ALIGNMENT HEALTHCARE, INC. (ALHC) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/ALHC

Headline

FieldValue
TickerALHC
CompanyALIGNMENT HEALTHCARE, INC.
Current price$20.29/sh

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Price-to-book20.28x

The implied return on book is non-physical at this price-to-book and is suppressed as misleading. The price sits beyond a 17.4% return on equity sustained for 40 years and is not resolvable as a sustainable-ROE point. The rarity read below is the honest signal.

How unusual the bet is: extreme

ReferenceValue
vs own history+8.42σ
cohort percentile (of 80 peers)99
sustained it ~10 years at this level24%
implied end-window share0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset19.89x3expensive
Earnings4.13x4expensive
Relative3.89x5expensive
Growth0.69x3justifies

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$51.190.40xyesFCF base $0.2B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.7%, 7yr projection
DCF Exit MultipleGrowth$29.440.69xyesExit EV/EBITDA: 56.4x / 59.4x / 62.4x (bear / base = today's held flat / bull), 7yr
Relative ValuationRelative$6.723.02xyesP/E 37.4x (blended: static sector reference 17x + trailing (TTM) 218x), scenarios: 29.9x / 37.4x / 44.9x (bear / base = reference held flat / bull), EV/EBITDA 24.2x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$1.0020.29xyesBV/sh $0.97, ROE (TTM) 9.6%, ke 9.3% (excluded from median)
Two-Stage Excess ReturnAsset$1.0219.89xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$29.440.69xyesRev $4.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 0.8x / 1.0x / 1.2x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$1.2016.91xyesEPS $0.10, growth 1% (input: historical EPS growth), PEG=161.30 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$1.0219.89xyesBV $0.97 + 5yr PV of (ROE (TTM) 9.6% − Kₑ 9.3%) × BV; BV grows 6.2%/yr
Graham NumberAsset$1.4813.71xyes√(22.5 × EPS $0.10 × BVPS $0.97) — Graham's conservative floor
EV/EBITDA RelativeRelative$5.223.89xyesEBITDA $0.07B × sector EV/EBITDA 11.0x
FCF YieldEarnings$13.261.53xyesFCF $226.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$10.271.98xyesSBC-adj FCF $0.17B (FCF $0.23B − SBC $0.06B) capitalized at Kₑ
Ben Graham FormulaEarnings$3.236.28xyesEPS $0.10 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$13.981.45xyesRevenue $4.26B × sector P/S 0.7x
PEG Fair ValueRelative$3.755.41xyesEPS $0.10 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$1.0818.79xyesEPS $0.10 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (dilution)2.3%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Bull Case

What the standard valuation lenses miss about Alignment is what the business actually sells. It is not an insurer that prices risk and collects a spread. It is a clinical model wrapped in an insurance license. The company is paid a fixed amount per enrolled member each month, and in its own words "for each enrolled member (i.e., revenue per member per month or 'PMPM'), we take responsibility for coordinating and managing our members' healthcare-both their health outcomes and the total costs of their care". That sentence is the whole bet. If Alignment manages care better than a traditional plan, the difference between the PMPM payment and the cost of delivering care is the profit, and that profit compounds as the member base grows.

The member base is growing fast and the economics are turning the right way at the same time. First-quarter 2026 revenue was $1.2 billion, up 33% from a year earlier, on membership of about 284,800, roughly 31% higher year over year. Growth at that pace usually comes at the expense of margin in managed care, because new members arrive before their care patterns and risk scores are understood. Alignment showed the opposite: adjusted medical benefit ratio improved year over year and adjusted SG&A fell as a share of revenue. The company raised the midpoint of every guidance metric and pointed to a full-year 2026 adjusted EBITDA consensus near $145 million as inside its own range. A growth company improving unit economics while it scales is the rare case where the top line and the margin line move together.

The runway is the Medicare Advantage program itself. Alignment's revenue relates, in the filing's language, "directly or indirectly, to the Medicare Advantage program, which accounted for substantially all of our total revenue", and the company's own framing of its market hinges on "the extent to which the overall pool of MA-eligible beneficiaries continues to grow and the extent to which the historical trend of increased MA market" penetration holds. The aging of the eligible population is demographic, not cyclical. The clinical model is built to take a larger share of that growing pool in the geographies where Alignment already operates, and the operating leverage in SG&A says each new market should cost less to serve than the last.

Bear Case

The valuation methods do not agree, and the ones with the least to assume are the ones saying the price is stretched. Book value plus profitability, peer multiples, and earnings-power lenses all land far below today's $21.85 (June 27, 2026). Only the forward-growth methods reach the price, and they reach it by projecting today's revenue trajectory and margin out for years and discounting back. The conservative read is the more honest one here: the price is not paying for what Alignment has earned, it is paying for what Alignment has not yet sustained. At roughly 21.8 times book value, the shares carry a multiple that almost no health plan defends, and that multiple holds only if the recent margin improvement is permanent rather than a good stretch.

The medical benefit ratio is where the thesis lives or dies, and it is genuinely hard to control at this stage. The ratio is the cost of care divided by premium revenue, and a few points of drift erases the operating margin entirely. Two structural exposures make that drift more likely than for a mature plan. First, the revenue itself is an estimate until it settles: the company "estimate[s] risk adjustment payments based upon the diagnosis data submitted and expected to be submitted to CMS", and that data "is also subject to review by the government, including audit". A downward revision to risk scores lowers premium after the care has already been delivered. Second, the company carries risk-corridor settlements on pharmacy claims whose estimate "requires us to consider factors that may not be certain". The price assumes these estimates keep landing favorably as membership scales 31% a year, which is exactly the period when a plan understands its new members least.

Then there is the competition, which Alignment describes plainly. The industry is "highly competitive" and "many of our competitors have a larger membership base and/or greater financial resources than we do", with the company competing "directly with national, regional and local Medicare Advantage organizations for members and healthcare providers". The national plans can absorb a bad benefit year across a far larger book; Alignment cannot. The balance sheet adds a quieter pressure: the share count has been rising, near a low-single-digit annual pace, so per-share value has to grow faster than the business just to stand still. None of this means the model fails. It means the price has priced the model succeeding, and the bear case is that managed-care margins at a fast-growing plan rarely hold the line that the multiple now requires.

Valuation

Start with what the price is paying for. Alignment is valued the way an insurer is valued, off the equity it holds rather than off an operating multiple, and at $21.85 the shares trade at about 21.8 times book value. That is the top of its peer cohort. The return on that book required to support the multiple sits so far above anything a managed-care plan has sustained that no single figure expresses it honestly, so the cleaner way to say it is plainly: the price pays a multiple of book that no demonstrated return record supports. The bet is durable, improving profitability on a fast-growing member base, not a return already in hand.

The methods we use to triangulate split sharply on whether that bet is earned. The asset-value lens, built on book value and recent profitability, lands near $1 to $1.50 a share. The peer-multiple lens reaches the mid-single digits, with a relative earnings read near $6.72 and an enterprise-value-to-EBITDA read near $5.22 against a sector multiple. The earnings-power lens, capitalizing free cash flow at the cost of equity, reaches about $13.26. Every one of those sits well below the price. Only the forward-growth methods cross it: a perpetual-growth cash-flow model reaches roughly $50.79 by projecting today's revenue growth forward, and an exit-multiple cash-flow model reaches about $30.97 only by holding today's lofty enterprise-value-to-EBITDA multiple flat for the life of the forecast. The spread between the static lenses and the growth lenses is the premium. It says the price is a wager on durable compounding that the backward-looking methods structurally cannot frame.

The peer cohort sharpens the picture. Alignment sits among managed-care and protection-focused financials, and its price-to-book sits at the very top of that group. Where a mature plan trades near or below book on demonstrated returns, Alignment trades at a large multiple of book on expected ones. The balance sheet bounds the downside only partly: this is a regulated insurer funded by member premiums rather than corporate debt, so the standard net-debt and coverage math does not apply, and the relevant question is regulatory capital and the durability of the medical benefit ratio rather than interest cover. The rising share count is the one solvency-adjacent fact that cuts against the holder, because growth funded partly through dilution asks per-share value to climb faster than the enterprise does.

Catalysts

The first quarter of 2026 was the print that moved the story. Alignment reported revenue of $1.2 billion, up 33% year over year, on membership of about 284,800, and returned to profitability while doing it. Adjusted gross profit was roughly $146 million at an adjusted medical benefit ratio near 88.2%, an improvement of about 20 basis points year over year, and adjusted SG&A fell to about 8.7% of revenue. Management raised the midpoint of all guidance metrics: membership, revenue, adjusted gross profit, and adjusted EBITDA.

The forward markers are set. The company guided to year-end 2026 health-plan membership of 290,000 to 296,000 and stated that a full-year 2026 adjusted EBITDA consensus near $145 million sits within its guidance range. The next earnings print is the test of whether the medical benefit ratio holds as the newest members move through their first full year, which is the line that decides whether the raised guidance converts to durable margin. For a plan growing membership above 30% a year, each quarterly benefit-ratio reading carries more signal than the headline revenue beat.

Peer Cohorts (Per Segment, With Filing Citations)

Alignment Healthcare (consolidated) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 FY2026 earnings release

View the full interactive ALHC report on boothcheck