US$10.96: That's What Analysts Think Alignment Healthcare, Inc. (NASDAQ:ALHC) Is Worth After Its Latest Results
Shareholders might have noticed that Alignment Healthcare, Inc. (NASDAQ:ALHC) filed its third-quarter result this time last week. The early response was not positive, with shares down 9.8% to US$7.27 in the past week. The business exceeded expectations with revenue of US$1.4b coming in 3.4% ahead of forecasts. Statutory losses were US$0.04 a share, in line with what the analysts predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Alignment Healthcare's 13 analysts is for revenues of US$6.56b in 2027. This would reflect a major 33% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 28% to US$0.18. In the lead-up to this report, the analysts had been modelling revenues of US$6.51b and earnings per share (EPS) of US$0.33 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
See our latest analysis for Alignment Healthcare
The average price target fell 11% to US$10.96, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alignment Healthcare, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$8.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Alignment Healthcare'shistorical trends, as the 25% annualised revenue growth to the end of 2027 is roughly in line with the 31% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.1% annually. So it's pretty clear that Alignment Healthcare is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Alignment Healthcare. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Alignment Healthcare analysts - going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Alignment Healthcare you should know about.
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