Is Alignment Healthcare (ALHC) the Best Performing Healthcare Stock to Buy Now?
We recently published a list of . In this article, we are going to take a look at where Alignment Healthcare, Inc. (NASDAQ:ALHC) stands against other best performing healthcare stocks to buy now.
On April 15, CNBC reported that President Trump's healthcare-focused executive order brought in a win for the sector. Trump directed his health department to collaborate with Congress to revamp a law allowing Medicare to negotiate prescription drug prices. The announcement seeks to bring a change that the pharmaceutical company has lobbied for. Since the negotiation process is included in legislation, Trump's executive order cannot implement the change itself. However, it directs Secretary of Health and Human Services Robert F. Kennedy Jr. to join hands with Congress and change it.
CNBC reported that drug makers have been working to delay the eligibility timeline for small-molecule drugs to be available for price negotiations by four years. This typically includes pills and most medications. This goes hand in hand with the 13-year wait until more complex biotech drugs are eligible for Medicare price negotiations.
Trump's wide-ranging executive order also focuses on slashing healthcare costs. It comes a day after the administration instituted a national security report on the pharma industry. CNBC called the report 'a precursor to sector-specific tariffs.'
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Medicare's negotiating powers have been a subject of contention, as drug makers have opined that they would suppress innovation and have rallied against the time frame for negotiation eligibility for most drugs. The law now allows the government to negotiate prices for drugs with no competition, which includes complex biotech or biologic medications after 13 years on the market, but 9 years for their administration as capsules and pills.
Although they did not provide specifics, White House officials told reporters that other changes to the negotiation process would yield more savings than those attained during the first round under the Biden administration. While the Biden administration negotiated price cuts as steep as 79% for the first ten most expensive drugs to the Medicare program, the Trump administration would negotiate prices for the following 15 medications. This includes Pfizer's cancer drugs Ibrance and Xtandi, as well as Novo Nordisk's blockbuster diabetes and weight-loss treatments Ozempic and Wegovy.
We used Finviz to screen healthcare stocks and selected the best performers based on their year-to-date (YTD) performance, as of May 9, 2025. We also included the number of hedge fund holders for each stock as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey's database. The list is sorted in ascending order of year-to-date performance.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points ().
A doctor holding a clipboard talking to an elderly patient in a Medicare Advantage healthcare facility.
YTD Performance: 34.40%
Number of Hedge Fund Holders: 29
Alignment Healthcare, Inc. (NASDAQ:ALHC) offers a consumer-centric platform for delivering personalized healthcare solutions through its Medicare Advantage plans. The company also offers health options via its Alignment Health Plan. It ranks 11th on our list of the best-performing healthcare stocks to buy now.
In a report issued on May 1, Whit Mayo from Leerink Partners reiterated a Buy rating on Alignment Healthcare, Inc. (NASDAQ:ALHC) and set a price target of $20.00. The company's positive financials in its latest earnings report have led to bullish investor sentiment, with revenue undergoing a notable 47.5% increase to $926.9 million in fiscal Q1 2025.
Alignment Healthcare, Inc. (NASDAQ:ALHC) also reported a 31.7% increase in Medicare Advantage membership, totaling around 217,500 members in the same quarter. Supported by robust enrollment growth and clinical performance, the company surpassed its high-end guidance on key performance indicators, raising the midpoint of its 2025 guidance. Alignment Healthcare, Inc. (NASDAQ:ALHC) expects adjusted EBITDA between $10 million and $18 million in fiscal Q2 2025.
Overall, ALHC ranks 11th on our list of the best performing healthcare stocks to buy now. While we acknowledge the potential for ALHC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ALHC but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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