Alignment Healthcare Stock Rebound
Alignment Healthcare Inc (NASDAQ:ALHC) shares rose 6.2% on Thursday, recovering from an approximate 17% decline the previous day after a whistleblower lawsuit was reported. The lawsuit, filed by former executive Hakan Kardes, alleges that the company mis‑classified operating expenses as capital expenditures, which could have inflated Adjusted EBITDA by between $8 million and $10 million.
According to the company, Kardes resigned voluntarily in April 2025 and did not raise any accounting concerns while employed; the issue was first raised internally about a month after his resignation, in May 2025. Court filings, however, contend that Kardes raised the concern internally before his resignation, communicating with senior executives in March and early April 2025.
The board responded by engaging outside lawyers and accountants in 2025 to investigate the allegations. The investigation, overseen by the board’s independent Audit Committee with external counsel, found no evidence supporting the claims. Deloitte, the company’s external auditor, continued to support the accounting treatment in its regular audit work.
KeyBanc analyst Matthew Gillmor maintained an Overweight rating on ALHC with a price target of $28.00, describing the allegation of mis‑classification as “dubious” and noting that capital‑expenditure classifications are reviewed by Alignment’s external accountant.
Raymond James analyst John Ransom reiterated a Strong Buy rating, stating that the alleged EBITDA impact is “manageable in the broader context” and does not affect the core earnings engine, though the lawsuit may remain a modest overhang until resolved.
Analysts collectively suggested that the prior day’s sell‑off was excessive and presented a buying opportunity for investors.