Alight (ALIT) Stock Forecast & Price Target

Alight Inc. has reported a year-over-year increase of 7.8% in BPaaS revenue, contributing approximately 24% to total revenue, showcasing growth in its core offerings despite the recent divestitures. The company's investment thesis highlights a diversified portfolio in healthcare and benefits solutions aimed at enterprise clients, which positions Alight to capture larger deals and accelerate revenue growth. Furthermore, with strong margins, cash flow, and high client retention rates, Alight is expected to generate a stable revenue stream that can enhance investor confidence, particularly in an unpredictable economic landscape.

Alight Inc. is facing a challenging financial outlook, highlighted by updated guidance indicating a projected total revenue decline of 3%-4% year-over-year to $2.25 billion-$2.28 billion, alongside a 0.2% dip in recurring revenue and a significant 20% decline in project revenue. Additionally, the company has lowered its top-line guidance for FY25, citing a lengthening sales cycle and lower volumes that are expected to negatively impact in-year revenue by approximately $45 million. These factors, combined with the cumulative modest disappointments in growth and margin outlook over the past three years, contribute to a cautious assessment of the stock's future performance.