Alight (ALIT) Stock Forecast & Price Target

Alight Inc. has demonstrated strong growth with BPaaS revenue of $146 million, reflecting a year-over-year increase of 9.8% and currently accounting for approximately 21.5% of total revenue. The company's focus on comprehensive BPaaS deals is expected to enhance performance in FY25, with solid execution and disciplined expense management projected to support EBITDA and EPS growth in the coming years. Additionally, the recent announcement of an expanded buyback program and leadership changes at the Board level may contribute positively to maximizing shareholder value and sustaining the company's growth momentum.

Alight Inc. faces a challenging outlook due to a modest reduction in revenue and EBITDA estimates for FY25, with expectations now pegged between $2.318 billion and $2.388 billion, indicating stagnation at the midpoint compared to consensus projections. The company has experienced a ~12% stock decline since the election, driven by concerns over the potential adverse impacts from the newly established Department of Government Efficiency, which may lead to reduced governmental spending and subsequently, diminished revenue opportunities. Additionally, the company's recent divestitures and the negative sentiment tied to stock sales by Cannae Holdings have contributed to increased uncertainty and a potential downside risk to its valuation, specifically an EV/EBITDA multiple of approximately 7x for FY26 estimates.