Alignment Healthcare, Inc. (NASDAQ: ALHC)

Sector: Healthcare Industry: Healthcare Plans CIK: 0001832466
Market Cap 3.90 Bn
P/B 24.06
P/E -187.18
P/S 1.07
ROIC (Qtr) 0.54
Div Yield % 0.00
Rev 1y % (Qtr) 43.51
Total Debt (Qtr) 329.66 Mn
Debt/Equity (Qtr) 2.04
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About

Alignment Healthcare, Inc. (ALHC) operates in the healthcare industry, with a focus on improving healthcare outcomes for seniors. The company, which trades under the ticker symbol ALHC, has been revolutionizing the industry since its inception in 2013. Its mission is to enhance healthcare one senior at a time, guided by core values that prioritize the senior, support doctors, leverage data and technology to transform care, and uphold a serving heart. Alignment Healthcare's primary business activities revolve around providing a consumer-centric...

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Investment thesis

Bull case

  • Strong operating cash flow of 181.59M provides robust 0.55x coverage of total debt 329.66M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 181.59M provides exceptional 10.47x coverage of interest expenses 17.34M, showing strong debt service capability.
  • Strong tangible asset base of 1.07B provides 3.23x coverage of total debt 329.66M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 150.63M exceeds capital expenditure of 30.96M by 4.87x, indicating strong organic growth funding capability.
  • Cash reserves of 618.07M provide ample 580.34x coverage of acquisition spending 1.06M, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 181.59M barely covers its investment activities of (13.73M), with a coverage ratio of -13.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of 181.59M shows concerning coverage of stock compensation expenses of 65.20M, with a 2.79 ratio indicating potential earnings quality issues.
  • Operating earnings of (213000) show weak coverage of depreciation charges of 31.04M, with a -0.01 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 181.59M shows concerning coverage of minority interest expenses of (227000), which is -799.96x, suggesting complex corporate structure risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 419.77M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Healthcare Plans
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 UNH Unitedhealth Group Inc 275.49 Bn 47.39 1.75 80.14 Bn
2 CVS CVS HEALTH Corp 101.72 Bn 15.33 0.40 79.95 Bn
3 CI Cigna Group 85.42 Bn 23.60 0.41 34.04 Bn
4 ELV Elevance Health, Inc. 77.22 Bn 13.64 0.39 32.05 Bn
5 HUM Humana Inc 25.29 Bn 14.38 0.43 12.92 Bn
6 CNC Centene Corp 20.34 Bn -3.05 0.10 17.40 Bn
7 MOH Molina Healthcare, Inc. 7.17 Bn 15.19 0.16 3.95 Bn
8 ALHC Alignment Healthcare, Inc. 3.90 Bn -187.18 1.07 0.33 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.41 1.08
EV to Cash from Ops. EV/CFO 20.68 3.83
EV to Debt EV to Debt 11.39 9.18
EV to EBIT EV/EBIT -17,626.56 -1,594.13
EV to EBITDA EV/EBITDA 111.68 15.88
EV to Free Cash Flow [EV/FCF] EV/FCF 24.93 8.41
EV to Market Cap EV to Market Cap 0.96 1.08
EV to Revenue EV/Rev 1.03 0.68
Price to Book Value [P/B] P/B 24.06 4.79
Price to Earnings [P/E] P/E -187.18 -5.08
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.21
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 29.17
Dividend per Basic Share Div per Share (Qtr) 0.00 2.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.79
Interest Coverage Int. cover (Qtr) -0.01 -0.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 27.52 -30.05
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 81.62 18.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.04
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 99.79 -108.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 136.32 -60.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 99.82 -84.20
EBT Growth (1y) % EBT 1y % (Qtr) 87.82 -142.02
EPS Growth (1y) % EPS 1y % (Qtr) 85.71 -164.11
FCF Growth (1y) % FCF 1y % (Qtr) 180.68 111.09
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 75.06 7.06
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 3.30 2.20
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.11
Cash Ratio Cash Ratio (Qtr) 1.01 0.48
Current Ratio Curr Ratio (Qtr) 1.61 1.46
Debt to Equity Ratio Debt/Equity (Qtr) 2.04 0.77
Interest Cover Ratio Int Coverage (Qtr) -0.01 -0.47
Times Interest Earned Times Interest Earned (Qtr) -0.01 -0.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.80 1.97
EBIT Margin % EBIT Margin % (Qtr) -0.01 1.42
EBT Margin % EBT Margin % (Qtr) -0.48 0.98
Gross Margin % Gross Margin % (Qtr) 12.40 14.54
Net Profit Margin % Net Margin % (Qtr) -0.60 0.45