Alight (ALIT) AI Stock Analysis

• Market Cap: $3.22B
• Dividend Yield: 2.7%
• Average Volume (3M): 7.18M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.24
• Revenue Growth: -26.04%
• EPS Growth: 85.84%
• Country: US
• Employees: 9,500
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Application
• EPS (TTM): 0.10
• Shares Outstanding: 527,834,530
• 10 Day Avg. Volume: 8,536,357
• 30 Day Avg. Volume: 7,182,676
• PEG Ratio: -2.31
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.78
• Enterprise Value/Market Cap: 1.99
• Enterprise Value/Revenue: 0.63
• Enterprise Value/Gross Profit: 8.18
• Enterprise Value/Ebitda: 6.15
• 1Y Price Target: $8.50
• Price Target Upside: 42.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 61 Neutral
• Price Target: $6.50 ▲(8.70%Upside)

Alight's overall stock score reflects a mix of positive strategic initiatives and financial challenges. Strong earnings call performance and strategic advancements boost confidence, but profitability issues and valuation concerns weigh heavily. Technical indicators suggest potential short-term overvaluation risks.

Positive Factors

Client Relationships

Management remains laser-focused on rebuilding relationships with clients, consultants, and third-party evaluators.

Financial Performance

ALIT posted healthy 1Q results, beating estimates on both the top and bottom line due to better recurring revenue growth and good expense discipline.

Valuation

The shares are trading at an EV/FY26 EBITDA multiple of just 7x, making the risk-reward favorable for GARP investors.

Negative Factors

Project Revenue

Project revenue continues to face some headwinds.

Revenue Estimates

The result of these assumptions is a fine-tune down in 2025 revenue and NG EBITDA estimates of ~3-4% and <1%, respectively.

Revenue Headwinds

Some renewal losses in 2023 and what is a sector-wide lull in project based revenue are headwinds to the top line.

Alight Business Overview & Revenue Model

Company Description

Alight, Inc. operates as a cloud-based provider of integrated digital human capital and business solutions worldwide. It operates through three segments: Employer Solutions, Professional Services, and Hosted Business. The company's solutions enable employees to enrich their health, wealth, and wellbeing, which helps organizations achieve a high-performance culture. It offers employer solutions comprising integrated benefits administration, healthcare navigation, financial health, employee wellbeing, and payroll; and professional services, including cloud deployment and consulting offerings that provides human capital and financial platforms, as well as cloud advisory and deployment, and optimization services for cloud platforms, such as Workday, SAP SuccessFactors, Oracle, and Cornerstone OnDemand. Alight, Inc. was founded in 2017 and is headquartered in Lincolnshire, Illinois.

How the Company Makes Money

Alight 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 Financial Statement Overview

Summary

Alight's financial statements show consistent net losses, with negative EBIT and EBITDA margins indicating operational inefficiencies. However, the balance sheet is stable, with moderate leverage and a strong equity base. Cash flows are positive but volatile, requiring attention to maintain stability.

Income Statement

Alight's income statement reveals challenges with profitability, as indicated by consistent negative net income over recent years. The TTM gross profit margin stands at 33.74%, suggesting the company has a reasonable ability to cover its direct costs. However, the negative EBIT and EBITDA margins of -2.50% and 13.53% respectively, highlight operational inefficiencies or significant overhead costs. Revenue has shown fluctuations, with a notable decline in 2023, indicating potential volatility in sales.

Balance Sheet

The balance sheet demonstrates a stable equity position with a debt-to-equity ratio of 0.47 in the latest TTM period, indicating moderate leverage. The equity ratio is 53.44%, suggesting a balanced capital structure. Return on equity remains negative due to net losses, signaling a need for improved profitability. Overall, the balance sheet reflects a healthy financial structure with manageable debt levels.

Cash Flow

Cash flow analysis shows a mixed picture. The TTM operating cash flow to net income ratio is negative, highlighting the impact of losses on cash generation. Free cash flow has been positive but volatile, with a recent decline in growth rate. The free cash flow to net income ratio is positive, indicating some capacity to generate cash despite net losses. Overall, cash management appears adequate but requires attention to maintain stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.32B	2.33B	3.41B	3.13B	2.92B	2.73B
Gross Profit	783.00M	794.00M	1.14B	996.00M	693.00M	834.00M
EBITDA	314.00M	350.00M	186.00M	476.00M	481.00M	431.00M
Net Income	-47.00M	-157.00M	-345.00M	-62.00M	-60.00M	-103.00M
Balance Sheet
Total Assets	7.91B	8.19B	10.78B	11.23B	10.99B	6.96B
Cash, Cash Equivalents and Short-Term Investments	223.00M	343.00M	358.00M	250.00M	372.00M	506.00M
Total Debt	20.00M	2.16B	2.92B	3.00B	3.11B	4.36B
Total Liabilities	3.68B	3.88B	6.04B	6.15B	6.06B	6.27B
Stockholders Equity	4.23B	4.31B	4.46B	4.44B	4.14B	683.00M
Cash Flow
Free Cash Flow	52.00M	131.00M	226.00M	138.00M	1.00M	143.00M
Operating Cash Flow	166.00M	252.00M	386.00M	286.00M	115.00M	233.00M
Investing Cash Flow	843.00M	836.00M	-159.00M	-235.00M	-1.91B	-142.00M
Financing Cash Flow	-1.18B	-1.07B	-231.00M	54.00M	2.34B	463.00M

Alight Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALIT, the sentiment is Positive. The current price of 5.98 is above the 20-day moving average (MA) of 5.49, above the 50-day MA of 5.44, and below the 200-day MA of 6.39, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 69.20 is Neutral, neither overbought nor oversold. The STOCH value of 92.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALIT.

Alight Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PYCR	74 Outperform	$4.09B	―	-1.66%	―	15.72%	74.59%
BL	74 Outperform	$3.55B	26.24	44.83%	―	8.93%	102.77%
CNXC	73 Outperform	$3.65B	15.69	5.59%	2.34%	11.31%	-16.02%
PAY	70 Neutral	$3.89B	78.36	10.80%	―	47.78%	74.61%
Sector *	63 Neutral	$34.04B	6.14	-11.52%	1.82%	5.53%	-18.79%
ALIT	61 Neutral	$3.22B	―	-0.82%	2.70%	-26.04%	85.84%
BTDR	43 Neutral	$2.71B	―	-32.09%	―	―	―

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.

The most recent analyst rating on (ALIT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Alight stock, see the ALIT Stock Forecast page.

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.

The most recent analyst rating on (ALIT) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Alight stock, see the ALIT Stock Forecast page.

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.