Earnings Update: Here's Why Analysts Just Lifted Their Alignment Healthcare, Inc. (NASDAQ:ALHC) Price Target To US$9.55

Alignment Healthcare, Inc. (NASDAQ:ALHC) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Alignment Healthcare beat expectations with revenues of US$681m arriving 6.8% ahead of forecasts. The company also reported a statutory loss of US$0.13, 10.0% smaller than was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Alignment Healthcare

After the latest results, the ten analysts covering Alignment Healthcare are now predicting revenues of US$2.62b in 2024. If met, this would reflect a notable 17% improvement in revenue compared to the last 12 months. Losses are supposed to decline, shrinking 17% from last year to US$0.66. Before this earnings announcement, the analysts had been modelling revenues of US$2.53b and losses of US$0.67 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.

The consensus price target rose 11% to US$9.55, with the analysts encouraged by the higher revenue and lower forecast losses for next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Alignment Healthcare, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$7.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alignment Healthcare's past performance and to peers in the same industry. It's clear from the latest estimates that Alignment Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 38% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Alignment Healthcare is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Alignment Healthcare going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Alignment Healthcare you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com