Is Alignment Healthcare's (ALHC) Return to Profitability Reframing Its Investment Case?

• Alignment Healthcare, Inc. recently reported its third quarter 2025 earnings, delivering US$993.7 million in revenue and achieving net income of US$3.73 million, a turnaround from a net loss in the same period last year.
• The company's move to profitability, combined with updated full-year revenue guidance between US$3.93 billion and US$3.95 billion, marks a significant improvement in operational performance and outlook.
• We'll explore how Alignment Healthcare's shift to profitability shapes the company's investment narrative and future growth prospects.

The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

Alignment Healthcare Investment Narrative Recap

Shareholders in Alignment Healthcare need confidence in the company’s technology-driven Medicare Advantage model and its ability to maintain margin expansion despite industry headwinds. The recent return to profitability for the third quarter 2025 is encouraging, yet continued regulatory scrutiny and the threat of changes to federal reimbursement rules remain major risks. The improvement in guidance signals momentum, but the most important short-term catalyst, demonstrated membership and revenue growth, depends on sustaining these underlying trends. The biggest current risk is whether reimbursement pressure and policy debates on Medicare Advantage squeeze margins more than expected; this earnings report does not materially alter that risk profile.

The company’s updated full-year revenue guidance, now between US$3.93 billion and US$3.95 billion, directly relates to this quarter's results and bolsters the sense that Alignment is achieving scale at a faster clip. Increasing guidance for several quarters in a row has helped underpin the company’s near-term growth narrative, which is especially relevant given the ongoing expansion into new states and health plan options.

However, investors should also be aware that the ongoing policy focus on Medicare Advantage reimbursement, especially surrounding star ratings and federal funding, could quickly change future profitability expectations…

Read the full narrative on Alignment Healthcare (it's free!)

Alignment Healthcare's outlook anticipates $6.8 billion in revenue and $118.7 million in earnings by 2028. This calls for 26.7% annual revenue growth and a $169.7 million increase in earnings from the current level of -$51.0 million.

Uncover how Alignment Healthcare's forecasts yield a $20.45 fair value, a 21% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community contributed 2 individual fair value estimates for Alignment Healthcare, spanning from US$20.45 to US$23.77 per share. While views differ, many highlight robust membership and revenue growth as essential for sustained earnings power amid rising industry scrutiny.

Explore 2 other fair value estimates on Alignment Healthcare - why the stock might be worth as much as 41% more than the current price!

Build Your Own Alignment Healthcare Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Alignment Healthcare research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Alignment Healthcare research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alignment Healthcare's overall financial health at a glance.

Curious About Other Options?

Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:

• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.
• Explore 28 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.
• AI is about to change healthcare. These 33 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

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