Alight (ALIT) AI Stock Analysis

• Market Cap: $1.80B
• Dividend Yield: 4.79%
• Average Volume (3M): 7.97M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: -19.48%
• EPS Growth: -398.43%
• Country: US
• Employees: 9,500
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.10
• Shares Outstanding: 528,867,900
• 10 Day Avg. Volume: 6,788,234
• 30 Day Avg. Volume: 7,966,329
• PEG Ratio: 0.41
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 1.62
• P/FCF Ratio: 28.85
• Enterprise Value/Market Cap: 2.61
• Enterprise Value/Revenue: 2.03
• Enterprise Value/Gross Profit: 5.93
• Enterprise Value/Ebitda: -6.86
• 1Y Price Target: $5.83
• Price Target Upside: 74.55% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 46 Neutral
• Price Target: $4.00 ▲(19.76% Upside)

Alight's overall stock score is primarily impacted by its financial performance and technical analysis. The company faces significant financial challenges with declining revenues and profitability, although stable cash flow provides some support. Technical indicators suggest bearish momentum, with the stock trading below key moving averages and showing oversold conditions. Valuation concerns are evident with a negative P/E ratio, though the dividend yield offers some compensation. Despite strategic advancements and partnerships, short-term revenue outlook remains pressured.

Positive Factors

Strategic Partnerships

Strategic partnerships with tech giants like Microsoft and IBM enhance Alight's technological capabilities, potentially leading to improved service delivery and competitive positioning in the human capital solutions market.

Cash Flow Stability

A significant increase in free cash flow indicates strong cash generation ability, providing Alight with financial flexibility to invest in growth initiatives and weather economic uncertainties.

Client Retention

Strong client renewals with major companies suggest high customer satisfaction and loyalty, which are critical for sustaining long-term revenue streams and market position.

Negative Factors

Declining Revenue

Significant revenue decline reflects challenges in maintaining business growth, which could impact long-term profitability and market competitiveness if not addressed.

Profitability Concerns

Negative profit margins indicate operational inefficiencies and financial stress, which could hinder Alight's ability to reinvest in business development and innovation.

Commercial Execution Challenges

Delays in closing deals and execution challenges can limit revenue growth and affect market perception, potentially impacting Alight's competitive edge and strategic goals.

Alight Business Overview & Revenue Model

Company Description

Alight (ALIT) is a leading provider of technology-enabled health, wealth, and human capital solutions. The company specializes in delivering comprehensive benefits administration, cloud-based HR and payroll services, and workforce management solutions. Alight serves a diverse range of clients, including large enterprises and government organizations, by leveraging data analytics and innovative technology to enhance employee engagement and optimize operational efficiencies.

How the Company Makes Money

Alight generates revenue primarily through its service offerings, which include benefits administration, payroll processing, and human capital management services. The company operates on a subscription-based model, charging clients a recurring fee for access to its platforms and services. Additionally, Alight earns revenue from consulting services related to workforce and benefits strategy. Key partnerships with technology providers and integrations with major HR systems enhance its service delivery, while ongoing client relationships contribute to stable revenue streams. The company's focus on scaling its digital solutions and expanding its service offerings also plays a crucial role in driving growth and profitability.

Alight Financial Statement Overview

Summary

Alight faces significant challenges with declining revenues and profitability, as evidenced by negative margins and a substantial net loss. The balance sheet shows a stable capital structure with low leverage, but profitability remains a concern with negative ROE. Cash flow performance is a relative strength, with positive growth in free cash flow, providing some financial stability. Overall, while there are areas of concern, particularly in profitability, the company maintains a stable cash flow position.

Income Statement

Alight's income statement shows declining revenue with a negative growth rate of -43.1% in the TTM period. The company has a negative net profit margin of -49.46%, indicating significant losses. Gross profit margin remains moderate at 34.27%, but the EBIT and EBITDA margins are negative, reflecting operational challenges. Overall, the income statement indicates financial stress with declining revenues and profitability issues.

Balance Sheet

The balance sheet reveals a relatively low debt-to-equity ratio of 0.64 in the TTM period, suggesting manageable leverage. However, the return on equity is negative at -29.14%, indicating inefficiencies in generating returns for shareholders. The equity ratio stands at 45.99%, showing a stable capital structure. While leverage is under control, the negative ROE highlights profitability concerns.

Cash Flow

Alight's cash flow statement shows a positive free cash flow growth rate of 27.93% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.22, suggesting some cash flow stability despite net losses. The free cash flow to net income ratio is 0.43, reflecting a decent conversion of cash flows relative to net income. Overall, cash flow performance is relatively stable, with positive growth in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.31B	2.33B	3.41B	3.13B	2.92B	2.73B
Gross Profit	792.00M	794.00M	1.14B	996.00M	693.00M	834.00M
EBITDA	-684.00M	350.00M	186.00M	476.00M	481.00M	431.00M
Net Income	-1.16B	-157.00M	-345.00M	-62.00M	-60.00M	-103.00M
Balance Sheet
Total Assets	6.78B	8.19B	10.78B	11.23B	10.99B	6.96B
Cash, Cash Equivalents and Short-Term Investments	227.00M	343.00M	358.00M	250.00M	372.00M	506.00M
Total Debt	2.14B	2.16B	2.92B	3.00B	3.11B	4.36B
Total Liabilities	3.66B	3.88B	6.04B	6.15B	6.06B	6.27B
Stockholders Equity	3.12B	4.31B	4.46B	4.44B	4.14B	683.00M
Cash Flow
Free Cash Flow	142.00M	131.00M	226.00M	138.00M	1.00M	143.00M
Operating Cash Flow	253.00M	252.00M	386.00M	286.00M	115.00M	233.00M
Investing Cash Flow	857.00M	836.00M	-159.00M	-235.00M	-1.91B	-142.00M
Financing Cash Flow	-1.09B	-1.07B	-231.00M	54.00M	2.34B	463.00M

Alight Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALIT, the sentiment is Negative. The current price of 3.34 is below the 20-day moving average (MA) of 3.70, below the 50-day MA of 4.34, and below the 200-day MA of 5.59, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 28.74 is Positive, neither overbought nor oversold. The STOCH value of 5.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALIT.

Alight Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALKT	69 Neutral	2.63B	-66.83	-11.19%	―	29.63%	29.87%
GBTG	68 Neutral	3.90B	-63.10	-13.13%	―	3.61%	-44.99%
CALX	65 Neutral	4.11B	-154.98	-3.48%	―	-8.80%	-657.91%
BRZE	64 Neutral	3.56B	-30.70	-18.17%	―	22.16%	11.65%
BLKB	56 Neutral	3.23B	-11.50	-317.65%	―	0.11%	-817.49%
ALIT	46 Neutral	$1.80B	―	-29.09%	4.79%	-19.48%	-398.43%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Alight Corporate Events

Alight Announces Director Elections and Auditor Ratification

At the 2025 Annual Meeting of Stockholders held on June 4, Alight, Inc. announced the election of its Class I directors, with terms expiring at the 2028 Annual Meeting. The stockholders also ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and approved the 2024 compensation for named executive officers on an advisory basis.

Alight Increases Credit Facility by $30 Million

On May 30, 2025, Alight, Inc.’s subsidiary, Tempo Acquisition, LLC, amended its credit agreement to establish a new incremental revolving credit facility, increasing commitments by $30 million to a total of $330 million. This amendment replaces previous commitments and extends the maturity date to May 31, 2030, with specific refinancing conditions by June 1, 2028. The interest rates for the facility are tied to the Borrower’s consolidated first lien net leverage ratio, and certain fees are required in connection with the amendment.