Health insurance company Alignment Healthcare (NASDAQ: ALHC) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 33.3% year on year to $1.24 billion. On the other hand, next quarter’s revenue guidance of $1.31 billion was less impressive, coming in 0.9% below analysts’ estimates. Its GAAP profit of $0.05 per share was significantly above analysts’ consensus estimates.
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Alignment Healthcare (ALHC) Q1 CY2026 Highlights:
- Revenue: $1.24 billion vs analyst estimates of $1.22 billion (33.3% year-on-year growth, 1.3% beat)
- EPS (GAAP): $0.05 vs analyst estimates of $0.01 (significant beat)
- Adjusted EBITDA: $37.85 million vs analyst estimates of $32.51 million (3.1% margin, 16.4% beat)
- The company slightly lifted its revenue guidance for the full year to $5.18 billion at the midpoint from $5.16 billion
- EBITDA guidance for the full year is $150.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 1.3%, up from -0.6% in the same quarter last year
- Free Cash Flow Margin: 9.8%, up from 0.9% in the same quarter last year
- Customers: 284,800, up from 236,300 in the previous quarter
- Market Capitalization: $4.44 billion
“Our first-quarter performance demonstrates that Alignment continues to grow with discipline,” said John Kao, founder and CEO.
Company Overview
Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare (NASDAQ: ALHC) provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Alignment Healthcare grew its sales at an incredible 33.6% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Alignment Healthcare’s annualized revenue growth of 45.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Alignment Healthcare reported wonderful year-on-year revenue growth of 33.3%, and its $1.24 billion of revenue exceeded Wall Street’s estimates by 1.3%. Company management is currently guiding for a 28.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 28.8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and indicates the market sees success for its products and services.
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Adjusted Operating Margin
Alignment Healthcare was roughly breakeven when averaging the last five years of quarterly operating profits, lousy for a healthcare business.
On the plus side, Alignment Healthcare’s adjusted operating margin rose by 5.4 percentage points over the last five years, as its sales growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements. These data points are very encouraging and show momentum is on its side.
This quarter, Alignment Healthcare generated an adjusted operating margin profit margin of 2.4%, up 1 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Alignment Healthcare’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
In Q1, Alignment Healthcare reported EPS of $0.05, up from negative $0.05 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Alignment Healthcare’s full-year EPS of $0.09 to grow 124%.
Key Takeaways from Alignment Healthcare’s Q1 Results
It was good to see Alignment Healthcare beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter slightly missed and its EBITDA guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The market seemed to be hoping for more, and the stock traded down 7.2% to $20.90 immediately following the results.
Is Alignment Healthcare an attractive investment opportunity at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
