Alight (ALIT) Stock Forecast & Price Target

Alight Inc. demonstrates a positive outlook due to its high level of recurring revenue and predictable cash flow, which supports a reasonable leverage ratio. The company is undergoing strategic changes, including an expanded board size and the appointment of new directors, following the cooperation agreement with Starboard, its largest shareholder. Additionally, Alight's focused strategy, following the divestiture of its Professional Services segment and Payroll & HCM Outsourcing business, positions it well for enhanced operational efficiency within its Employer Solutions segment.

Alight Inc. has revised its revenue guidance downwards, projecting a year-over-year decline of 3%-4% to a range of $2.25B-$2.28B, alongside adjusted EBITDA growth expectations that remain flat to slightly increased at $595M-$620M. The company has faced ongoing growth and margin disappointments, which have contributed to a significant year-to-date share price decline of over 70%. Additionally, Alight's revenue model, primarily based on contracted fees from corporate customers, renders it vulnerable to economic downturns that could lead to decreased employment levels and renegotiation of contracts by clients, potentially impairing future profitability.