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Alight (ALIT)
NYSE:ALIT
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Alight (ALIT) AI Stock Analysis

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ALIT

Alight

(NYSE:ALIT)

Rating:46Neutral
Price Target:
$4.00
▲(4.71% 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
Partnerships
A new partnership was announced with Goldman Sachs Asset Management, which will serve as sub-advisor for Defined Contribution and IRA solutions on the Alight Worklife platform.
Recurring Revenue
ALIT reported solid 2Q results, beating estimates on revenue and earnings driven by better recurring revenue growth and operating expense control.
Negative Factors
Price Target
Analyst is lowering the price target for Alight to $7 from $10.
Revenue Guidance
Management lowered their total revenue guidance for 2025 due to delayed closing on new deals and a continuation of lower non-recurring project revenue.

Alight (ALIT) vs. SPDR S&P 500 ETF (SPY)

Alight Business Overview & Revenue Model

Company DescriptionAlight Solutions (ALIT) is a leading provider of integrated human capital and business solutions, serving clients across various sectors including healthcare, financial services, and consumer products. The company offers a comprehensive suite of services aimed at optimizing workforce and benefits administration, enhancing employee engagement, and driving organizational efficiency. Alight's core products and services include human resources outsourcing, benefits administration, cloud-based HR solutions, and payroll services.
How the Company Makes MoneyAlight Solutions generates revenue primarily through a subscription and services-based model. The company's key revenue streams include fees from outsourcing services, such as human resources and payroll administration, which are typically structured around long-term contracts with clients. Additionally, Alight earns revenue from its cloud-based solutions, where clients pay subscription fees for access to its platforms and software. Significant partnerships with technology providers and strategic acquisitions also bolster Alight's offerings, enabling the company to expand its capabilities and reach within the human capital solutions market.

Alight Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong profitability, technological advancements, and strategic partnerships, but faced challenges with delayed bookings, nonrecurring revenue decline, and commercial execution affecting short-term revenue outlook.
Q2-2025 Updates
Positive Updates
Increased Profitability and Cash Flow
Revenue for the quarter was $528 million with an adjusted EBITDA of $127 million, representing an 80 basis point margin increase over the prior year. Free cash flow for the first half was up over 30%.
Strategic Advancements in Technology
Significant advancements were made using AI to redefine user experience and enhance client management and delivery capabilities. Partnerships with Microsoft and IBM were highlighted as key to scaling AI capabilities.
Partnership with Goldman Sachs
Alight announced a partnership with Goldman Sachs Asset Management to expand wealth offerings, expected to drive significant revenue growth over the next few years.
Strong Client Renewals
Notable client renewals include Target, Johnson & Johnson, Hyatt, State of Georgia, Best Buy, Highmark Health, and John Hancock, with some leading to an expansion of services.
Free Cash Flow Improvement
Free cash flow for the first half was $102 million, up 31% from the prior year, on track towards the annual target of $250 million to $285 million.
Negative Updates
Delayed ARR Bookings
ARR bookings growth expected to be flat or slightly down year-over-year instead of the initial double-digit growth target, impacting second half 2025 revenue.
Nonrecurring Revenue Decline
Nonrecurring project revenues were down $9 million or 20%. The second half pipeline did not build to levels that would drive an inflection in project revenue.
Goodwill Impairment Charge
A noncash goodwill impairment charge of $983 million was taken due to current market valuation compared to the value when going public.
Commercial Execution Challenges
The commercial execution has not been sufficient with client expansion opportunities taking longer to close and some deals not closing as expected.
Company Guidance
During Alight's second quarter 2025 earnings call, the company reported revenue of $528 million and an adjusted EBITDA of $127 million, demonstrating an 80 basis point margin increase over the prior year. The company also highlighted a 30% increase in free cash flow for the first half of the year. Despite these solid results, Alight adjusted its revenue outlook for 2025 due to delays in closing new deals. The company reaffirmed other guidance metrics, expecting an adjusted EBITDA between $620 million and $645 million, adjusted EPS of $0.58 to $0.64, and free cash flow of $250 million to $285 million. Alight emphasized its strategic initiatives, including advancements in AI and partnerships with companies like Microsoft, IBM, and Goldman Sachs, to enhance service delivery and client retention.

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
45
Neutral
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
55
Neutral
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
60
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.31B2.33B3.41B3.13B2.92B2.73B
Gross Profit792.00M794.00M1.14B996.00M693.00M834.00M
EBITDA-684.00M350.00M186.00M476.00M481.00M431.00M
Net Income-1.16B-157.00M-345.00M-62.00M-60.00M-103.00M
Balance Sheet
Total Assets6.78B8.19B10.78B11.23B10.99B6.96B
Cash, Cash Equivalents and Short-Term Investments227.00M343.00M358.00M250.00M372.00M506.00M
Total Debt2.14B2.16B2.92B3.00B3.11B4.36B
Total Liabilities3.66B3.88B6.04B6.15B6.06B6.27B
Stockholders Equity3.12B4.31B4.46B4.44B4.14B683.00M
Cash Flow
Free Cash Flow142.00M131.00M226.00M138.00M1.00M143.00M
Operating Cash Flow253.00M252.00M386.00M286.00M115.00M233.00M
Investing Cash Flow857.00M836.00M-159.00M-235.00M-1.91B-142.00M
Financing Cash Flow-1.09B-1.07B-231.00M54.00M2.34B463.00M

Alight Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3.82
Price Trends
50DMA
4.81
Negative
100DMA
5.04
Negative
200DMA
5.82
Negative
Market Momentum
MACD
-0.25
Negative
RSI
35.67
Neutral
STOCH
36.45
Neutral
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 3.82 is above the 20-day moving average (MA) of 3.81, below the 50-day MA of 4.81, and below the 200-day MA of 5.82, indicating a neutral trend. The MACD of -0.25 indicates Negative momentum. The RSI at 35.67 is Neutral, neither overbought nor oversold. The STOCH value of 36.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALIT.

Alight Risk Analysis

Alight disclosed 43 risk factors in its most recent earnings report. Alight reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alight Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
$3.88B-4.72%3.61%-44.99%
67
Neutral
$2.56B-11.47%29.63%29.87%
65
Neutral
$3.85B-3.52%-8.80%-657.91%
63
Neutral
$3.07B-22.82%22.66%21.20%
61
Neutral
$35.51B8.11-11.05%1.89%8.55%-8.72%
53
Neutral
$3.19B78.53-85.12%0.11%-817.49%
46
Neutral
$2.12B-29.09%4.19%-19.48%-398.43%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALIT
Alight
3.82
-3.14
-45.11%
BLKB
Blackbaud
66.35
-15.12
-18.56%
CALX
Calix
61.04
26.56
77.03%
GBTG
Global Business Travel Group
8.14
1.15
16.45%
ALKT
Alkami Technology
25.02
-4.30
-14.67%
BRZE
Braze
27.66
-7.91
-22.24%

Alight Corporate Events

Executive/Board ChangesShareholder Meetings
Alight Announces Director Elections and Auditor Ratification
Neutral
Jun 4, 2025

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.

Private Placements and Financing
Alight Increases Credit Facility by $30 Million
Neutral
Jun 3, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025