Alight (ALIT) Stock Forecast & Price Target

Alight Inc. reported a 7.8% year-over-year increase in BPaaS revenue, which accounted for approximately 24% of total revenue, highlighting the company's growth potential in its core offerings. The company is expected to see improvements in EBITDA and EPS growth due to solid execution and disciplined expense management, alongside an anticipated acceleration in growth driven by enhanced bookings and successful project deliveries. Alight's diversified healthcare and benefits solutions, coupled with healthy margins, strong cash flow, and impressive client retention rates, contribute to a durable revenue stream that positions the company favorably in an uncertain economic climate.

Alight Inc. has lowered its revenue guidance for FY25, anticipating a decline of 3%-4% year-over-year, indicating challenges in sustaining growth amid a lengthening sales cycle and reduced volumes. The company is experiencing a concerning 20% year-over-year drop in project revenue, along with a slight 0.2% dip in recurring revenue, which raises concerns about the stability of its financial performance. Additionally, the unpredictability of non-recurring revenue, stemming from its dependence on long-term contracts, could further exacerbate operational vulnerabilities in an economically unstable environment.