Alight (ALIT) Stock Forecast & Price Target

Alight Inc. has demonstrated a positive trajectory with BPaaS revenue reaching $125 million, reflecting a 7.8% year-over-year growth and constituting approximately 24% of total revenue, indicating strong core business performance. The company’s diversified offerings in healthcare and benefits solutions, alongside a focus on enterprise clients, position it favorably for future growth, particularly as bundled deals become a more significant revenue contributor. Furthermore, Alight's robust margins, solid cash flow, high client retention rates, and a favorable EV/FY26 EBITDA multiple of 6x suggest a resilient financial standing, appealing to growth-at-a-reasonable-price (GARP) investors in an uncertain economic environment.

Alight Inc is facing a challenging financial outlook as it has revised its total revenue expectations down by 3%-4% year-over-year, projecting revenues between $2.25 billion and $2.28 billion, while also indicating a slight decline of 0.2% in recurring revenue and a significant 20% decrease in project revenue. The company's reduced guidance for FY25 reflects the impact of a prolonged sales cycle and lower volumes, which are anticipated to further diminish revenue by approximately $45 million. Additionally, the uncertainty surrounding economic conditions may lead to impaired operations for clients, further compounding the volatility in Alight's revenue streams, particularly given the less predictable nature of non-recurring revenues.