Alight (ALIT) AI Stock Analysis

• Market Cap: $2.83B
• Dividend Yield: 1.43%
• Average Volume (3M): 10.41M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• Revenue Growth: -26.04%
• EPS Growth: 85.84%
• Country: US
• Employees: 9,500
• Sector: Technology
• Sector Strength: 67
• Industry: Software - Application
• EPS (TTM): 0.10
• Shares Outstanding: 531,889,900
• 10 Day Avg. Volume: 9,839,292
• 30 Day Avg. Volume: 10,414,919
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.87
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.64
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $9.67
• Price Target Upside: 73.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Alight's stock score is primarily constrained by its financial performance, highlighted by profitability issues and cash flow challenges. While earnings call insights and corporate events suggest strategic improvements and growth potential, the company's valuation and technical analysis present additional risks. The overall score reflects a cautious outlook with potential upside if strategic goals are met.

Positive Factors

Contractual Revenue

Approximately 92% of future revenue is already under contract, helping ALIT maintain a stable financial outlook.

Financial Performance

ALIT posted healthy results, beating estimates on both revenue and profitability due to better recurring revenue growth and good expense discipline.

Shareholder Value

ALIT announced an increase to its buyback program and multiple leadership changes at the Board level, which are expected to further maximize shareholder value.

Negative Factors

Employment Levels

Full employment levels could limit volume growth to some extent in the future.

Government Policy

The upcoming change in administration could have a modest negative impact to ALIT depending on the magnitude of cuts that the 'Department of Government Efficiency' is able to push through.

Project Revenue

Project revenue continues to face some headwinds, impacting the overall top line performance.

Alight Business Overview & Revenue Model

Company Description

Alight (ALIT) is a leading provider of integrated digital human capital and business solutions. Headquartered in the United States, Alight operates across various sectors, offering cloud-based solutions and services in human resources, payroll, benefits administration, and financial management. The company leverages its technology platform and expertise to help organizations improve their human capital management and employee engagement.

How the Company Makes Money

Alight makes money primarily through subscription and service fees charged for its cloud-based human capital management solutions. The company's revenue streams include fees for technology platforms, consulting services, and outsourcing solutions. Alight partners with organizations to manage their HR functions, providing tools for benefits administration, payroll processing, and talent management. Significant factors contributing to its earnings include long-term contracts with large enterprises, cross-selling opportunities across its suite of services, and its ability to attract and retain a diverse client base across different industries.

Alight Financial Statement Overview

Summary

Alight's financial performance is mixed. The income statement reveals challenges with profitability and revenue consistency, reflected in a low score of 45. The balance sheet is stronger, with a score of 60, indicating a healthy equity ratio despite operational challenges. Cash flow issues are notable, with a score of 50, due to declining free cash flow affecting growth potential.

Income Statement

Alight's revenue has shown inconsistencies, with a significant drop in the latest year. The gross profit margin has been relatively stable, but the company has consistently reported net losses. Negative EBIT and EBITDA margins in recent years highlight operational challenges.

Balance Sheet

Alight has a strong equity position, with stockholders' equity exceeding total liabilities, indicating a healthy equity ratio. However, the debt-to-equity ratio improved significantly in the latest year due to reduced total debt, suggesting better leverage management.

Cash Flow

Operating cash flow has been positive but declining. Free cash flow has decreased notably, impacting growth potential. The free cash flow to net income ratio indicates reliance on cash flow rather than profitability to sustain operations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.33B	3.41B	3.13B	2.92B	2.73B
	Gross Profit
794.00M	1.14B	996.00M	693.00M	834.00M
	EBIT
-90.00M	-101.00M	43.00M	194.00M	147.00M
	EBITDA
34.00M	186.00M	381.00M	481.00M	1.97B
	Net Income Common Stockholders
-157.00M	-345.00M	-72.00M	-60.00M	-103.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
343.00M	358.00M	250.00M	372.00M	506.00M
	Total Assets
8.19B	10.78B	11.23B	10.99B	6.96B
	Total Debt
2.16B	2.92B	2.82B	2.87B	4.36B
	Net Debt
1.81B	2.56B	2.57B	2.50B	3.85B
	Total Liabilities
3.88B	6.04B	6.15B	6.06B	6.27B
	Stockholders Equity
4.31B	4.46B	4.44B	4.14B	683.00M
Cash Flow		Free Cash Flow
131.00M	226.00M	138.00M	1.00M	143.00M
	Operating Cash Flow
252.00M	386.00M	286.00M	115.00M	233.00M
	Investing Cash Flow
836.00M	-159.00M	-235.00M	-1.91B	-142.00M
	Financing Cash Flow
-1.07B	-231.00M	54.00M	2.34B	463.00M

Alight Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALIT, the sentiment is Neutral. The current price of 5.57 is above the 20-day moving average (MA) of 5.17, below the 50-day MA of 5.63, and below the 200-day MA of 6.72, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 56.34 is Neutral, neither overbought nor oversold. The STOCH value of 73.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALIT.

Alight Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNXC	74 Outperform	$3.21B	12.61	6.34%	2.50%	21.67%	-17.91%
BL	73 Outperform	$2.94B	20.96	44.83%	―	8.93%	102.77%
PAY	73 Outperform	$4.39B	87.96	10.80%	―	47.78%	74.61%
Sector *	60 Neutral	$10.94B	10.37	-6.73%	2.98%	7.75%	-12.61%
ALIT	53 Neutral	$2.83B	―	-0.82%	1.43%	-26.04%	85.84%
BTDR	49 Neutral	$2.10B	―	-13.88%	―	―	―

Alight Corporate Events

Alight Announces New Restructuring Program Post-Divestiture

On May 6, 2025, Alight‘s Audit Committee approved a fifteen-month restructuring program, the Post-Separation Plan (PSP), aimed at optimizing operations after divesting its Payroll and Professional Services business in July 2024. The PSP involves simplifying operations, rationalizing technology spending, and expanding AI and automation, with expected restructuring costs of $65 million and annual savings of over $75 million. In its first quarter 2025 results, Alight reported a 2.0% revenue decrease to $548 million, improved net loss, and reaffirmed its full-year financial outlook, highlighting strong client relationships and a resilient business model with 92% of projected revenue under contract.

Spark’s Take on ALIT Stock

According to Spark, TipRanks’ AI Analyst, ALIT is a Neutral.

Alight’s stock score is primarily constrained by its financial performance, highlighted by profitability issues and cash flow challenges. While earnings call insights and corporate events suggest strategic improvements and growth potential, the company’s valuation and technical analysis present additional risks. The overall score reflects a cautious outlook with potential upside if strategic goals are met.

To see Spark’s full report on ALIT stock, click here.

Alight Unveils Growth Strategy at Investor Day

On March 20, 2025, Alight, Inc. hosted an investor day at its headquarters, unveiling mid-term financial targets and presenting its strategy for long-term growth. The event included panels with clients and third-party evaluators discussing market trends and client needs. Alight aims for a total annual revenue growth rate of 4-6% and an adjusted EBITDA margin of approximately 30% by 2027, with a cumulative free cash flow of around $1 billion between 2025 and 2027. This strategic direction underscores Alight’s positioning within the benefits industry and its commitment to leveraging technology for innovation and shareholder value.

Alight Announces New Board Leadership Changes

On February 20, 2025, Alight, Inc. announced significant changes to its Board of Directors, effective March 1, 2025. Russell P. Fradin was appointed as the new Chairman of the Board, succeeding William P. Foley, II, who will remain a board member. The board also welcomed new directors Robert Schriesheim, Robert Lopes, Jr., and Mike Hayes, while Erika Meinhardt, Regina Paolillo, and Dan Henson stepped down. These changes are part of Alight’s strategy to enhance leadership and governance, positioning the company for future success and value creation, as noted in their cooperation with Starboard Value, LP.