Alight (ALIT) Stock Forecast & Price Target

Alight is positioned to benefit from resilient cash generation and improving operating discipline, as 1H26 free cash flow of $101M was essentially flat year over year despite revenue and EBITDA pressure. Management expects 2026 free cash flow conversion in the low-40% range, implying roughly $160M-$185M, and plans to direct nearly all of it toward debt reduction, supporting leverage improvement toward 4.2x-4.4x by the end of 2Q28. Although 2026 and 2027 may still see declines before a 2028 recovery, the stock appears attractive at 5.5-6.0x the new 2028 adjusted EBITDA forecast of $381M, especially as recurring revenue remains near 92%-93% of sales and project revenue is supporting margin resilience.

Alight is under pressure because higher customer attrition in 2025 is now flowing through results, driving expected Y/Y declines in total revenue, adjusted EBITDA, and free cash flow in both 2026 and 2027, with the sharpest weakness in 2H26 and 1H27. Management’s 2026 guidance of a 7%-8% revenue decline and 26%-29% adjusted EBITDA decline was already below prior forecasts, while 2025 organic revenue fell about 4% and adjusted EBITDA dropped 6% Y/Y amid softer bookings and lower non-recurring project revenue. Balance sheet risk is also elevated, with $215M in cash, $1,996M in debt, 3.6x net leverage, and an expected peak of 5.2x-5.3x in 2Q27 as the turnaround and leadership reset take longer than expected.