Alignment Healthcare (ALHC.US): A Number of Headwinds to Work Through

We're lowering our PT to $9 from ($22) as we factor in near-term headwinds related to utilization pressures the company cited at a recent investor conference, factor in pressure related to the loss of Stars for 2028, and lower our EV/sales multiple. We are assuming the near-term utilization pressures persist into 2027, particularly as the pressure emerged after MA bids were due. Although, the company indicated they are working through this and suggested they priced for it but this remains uncertain to us. Collectively, our 2026-2028E adj EBITDA goes to $146/188/181 mln (was $158/214/302 mln). Unfortunately, a number of the items that are pressuring the company will likely take time to resolve and commensurately will take time for the stock to work. With that, sentiment is negative and valuations are at low points which provides at least some level of potential valuation support. All said, it will likely take time, and we remain Neutral as a number of items need to go right and the timi