May California DMHC Data Improves, Incrementally Supportive of 2Q26 MLR Guide

Research evidence excerpt

May California DMHC Data Improves, Incrementally Supportive of 2Q26 MLR Guide

Managed Care

Alignment Healthcare

TD SECURITIES (USA) LLC QUICK TAKE: COMPANY UPDATE

July 1, 2026

Price: $23.81 (06/30/2026) May California DMHC Data Improves,

Price Target: $25.00 Incrementally Supportive of 2Q26 MLR Guide

BUY (1)

Ryan Langston THE TD COWEN INSIGHT

646 562 1418

California released May health plan financial data; ALHC has ~80% of their MA enrollment

ryan.langston@tdsecurities.com

in the state. We view May CA data as supportive of recent ALHC commentary expressing

Christian Borgmeyer, CFA confidence in 2Q26 MLR guide, as MLR in May improved seq'l vs April by 410bps. Shares

646 562 1430 have fully recovered since 1Q26 EPS, and May data supports this directional move and June

christian.borgmeyer@tdsecurities.com

conference commentary.

William Spivack

202 868 5302 May California DMHC Data Materially Improves vs April - The California Department of

william.spivack@tdsecurities.com Managed Health Care ("DMHC") released May monthly financial statements for California

Gary Taylor health plans, including for ALHC which has ~80% of their total nationwide MA lives in

646 562 1450 California as of 5/01/26. This data includes monthly premium revenue and total medical

gary.taylor@tdsecurities.com expense - providing a directional snapshot of utilization trends in the state. For ALHC, DMHC

data shows May MLR at 85.1%, decelerating meaningfully by -410bps from 89.2% in April,

Key Data

bringing combined Apr+May to 87.1% vs 86.8% in 1Q26. Last year, May 2025 data indicated a

Symbol NASDAQ: ALHC

~-330bps MLR step-down from April 2025 also with higher premium revenue seq'l - suggesting

Market Cap $4.9B

that May may be when sweeps revenue is recognized in ALHC CA stat filings.