Alignment Healthcare's Strong 2024 Performance: EPS Beats Expectations, Membership Growth, and Adjusted EBITDA Profitability

Alignment Healthcare LLC (NASDAQ: ALHC) reported its full-year 2024 earnings on February 27, 2025, 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. With a market capitalization of $2.52 billion and a "GOOD" Financial Health Score according to InvestingPro, the company shows resilience despite challenging market conditions. Following the announcement, the stock surged 9.28% in after-hours trading, reflecting investor optimism.

Key Takeaways
Alignment Healthcare beat EPS and revenue forecasts for Q4 2024.
The stock rose 9.28% in after-hours trading, closing at $14.72.
The company achieved its first year of adjusted EBITDA profitability.
Membership grew by 59% in 2024, with significant expansion outside California.
2025 revenue guidance set between $3.72 billion and $3.78 billion, representing 37.6%-39.6% growth year-over-year.
Company Performance
Alignment Healthcare demonstrated robust performance in 2024, with total revenue reaching $2.7 billion, marking a 48% increase year-over-year. This growth aligns with the company's impressive 43.47% revenue growth in the last twelve months. The company also achieved its first full year of positive adjusted EBITDA as a public company, driven by operating leverage and strong medical benefits ratio performance. Membership increased by 59%, driven by expansion beyond California, notably in Nevada. InvestingPro analysis reveals 8 additional key metrics and insights available for subscribers, helping investors make more informed decisions about this rapidly growing healthcare company.

Financial Highlights
Full Year 2024 Revenue: $2.7 billion (+48% YoY)
Q4 2024 Revenue: $1 billion (+51% YoY)
Adjusted Gross Profit: $330 million
Medical (TASE:BLWV) Benefit Ratio: 88.8% for the full year
Cash and Investments: $471 million at year-end 2024
Earnings vs. Forecast
Alignment Healthcare's Q4 2024 EPS of -0.16 outperformed the forecast of -0.18, marking a positive surprise. Revenue also surpassed expectations, coming in at $701.2 million compared to the anticipated $674.97 million. This performance highlights the company's ability to exceed market predictions consistently.

Market Reaction
The stock experienced a notable increase of 9.28% in after-hours trading, closing at $14.72. This rise reflects investor confidence in the company's growth trajectory and its ability to deliver better-than-expected financial results. With a beta of 1.51, the stock shows higher volatility than the broader market, while maintaining a strong 94.65% return over the past year. The stock's movement is significant, considering its 52-week range, with a high of $15.82 and a low of $4.46.

Outlook & Guidance
For 2025, Alignment Healthcare forecasts revenue between $3.72 billion and $3.78 billion and expects adjusted gross profit to range from $415 million to $445 million. Current gross profit margins stand at 10.45%, while the company maintains a healthy current ratio of 1.6. The company anticipates membership to grow to between 227,000 and 233,000, underscoring its expansion strategy and market positioning. For detailed analysis and comprehensive valuation metrics, investors can access the full Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.

Executive Commentary
John Kao, CEO, emphasized the company's focus on care management, stating, "Our success starts with approaching Medicare Advantage as a care management business, not just an actuarial underwriting business." CFO Thomas Freeman expressed confidence in the company's future, saying, "We feel very good about our ability to achieve the 2025 guidance we laid out today."

Risks and Challenges
Changes in Medicare Advantage market dynamics could impact growth.
Regulatory adjustments, such as those in the Part D program, may alter profitability.
Economic pressures and inflation could affect operational costs.
Competition in the healthcare sector remains intense, requiring continued innovation.
Dependency on maintaining high STARS ratings for competitive advantage.
Q&A
During the earnings call, analysts inquired about the impact of the Inflation Reduction Act on the Part D program and how cohort maturation influences profitability. Executives highlighted their strategic differentiation from competitors and reiterated their confidence in sustaining high STARS ratings.




In conclusion, Alignment Healthcare's strong 2024 performance, marked by EPS and revenue beats, membership growth, and adjusted EBITDA profitability, demonstrates the company's resilience and growth potential. With a "GOOD" Financial Health Score and a market capitalization of $2.52 billion, the company is well-positioned for continued success in the healthcare sector. Investors should consider the company's strong financial performance, strategic focus on care management, and positive market reaction as they evaluate potential investment opportunities.