Alignment Healthcare, Inc. (NASDAQ:ALHC) faces challenges with a Return on Invested Capital (ROIC) of -23.60%, indicating inefficiency in capital utilization compared to its peers.
Aveanna Healthcare Holdings Inc. (AVAH) showcases a positive ROIC, outperforming its Weighted Average Cost of Capital (WACC) and indicating efficient capital use.
Other competitors like Privia Health Group, Inc. (PRVA) and Agiliti, Inc. (AGTI) have positive ROICs but their ROIC to WACC ratios suggest modest returns relative to their costs of capital.
Alignment Healthcare, Inc. (NASDAQ:ALHC) is a healthcare company that focuses on providing healthcare services to seniors. It operates primarily through its Medicare Advantage plans, aiming to offer personalized healthcare solutions. In the competitive landscape, ALHC faces peers like Privia Health Group, Inc. (PRVA), Agiliti, Inc. (AGTI), LifeStance Health Group, Inc. (LFST), agilon health, inc. (AGL), and Aveanna Healthcare Holdings Inc. (AVAH).
ALHC’s financial performance, particularly its Return on Invested Capital (ROIC) of -23.60%, is concerning. This negative ROIC, when compared to its Weighted Average Cost of Capital (WACC) of 12.08%, suggests that the company is not generating sufficient returns to cover its cost of capital. This is a critical metric for investors as it indicates inefficiency in capital utilization.
In contrast, Aveanna Healthcare Holdings Inc. (AVAH) showcases a positive ROIC of 12.85%, surpassing its WACC of 11.77%. This results in a ROIC to WACC ratio of 1.09, highlighting AVAH’s ability to generate returns above its cost of capital. This efficiency in capital use positions AVAH favorably among its peers.
Other peers like Privia Health Group, Inc. (PRVA) and Agiliti, Inc. (AGTI) have positive ROICs of 0.51% and 2.36%, respectively, but their ROIC to WACC ratios of 0.06 and 0.26 indicate modest returns relative to their costs of capital. These figures suggest that while they are performing better than ALHC, there is still room for improvement.
LifeStance Health Group, Inc. (LFST) and agilon health, inc. (AGL) also face challenges with negative ROICs of -3.58% and -49.92%, respectively. Their ROIC to WACC ratios of -0.37 and -6.67 further emphasize the struggle to generate returns above their costs of capital, similar to ALHC’s situation.
