Alight (ALIT, Financial) announced its first-quarter revenue of $548 million, surpassing analysts' expectations of $541.49 million. The company's CEO highlighted the robust beginning to the year, attributing success to their dedication to client-focused services and exemplary delivery. Significant progress in their artificial intelligence and service initiatives was emphasized as key contributors to their performance.
The organization remains committed to supporting clients in accessing and effectively managing their benefits, ensuring both health and financial security amid a changing global landscape. The CEO praised the team's skillful navigation of current challenges, reinforcing their mission's importance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Alight Inc (ALIT, Financial) is $10.17 with a high estimate of $11.00 and a low estimate of $8.00. The average target implies an upside of 94.39% from the current price of $5.23. More detailed estimate data can be found on the Alight Inc (ALIT) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Alight Inc's (ALIT, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Alight Inc (ALIT, Financial) in one year is $7.35, suggesting a upside of 40.54% from the current price of $5.23. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Alight Inc (ALIT) Summary page.
ALIT Key Business Developments
Release Date: February 20, 2025
- Revenue: $680 million for the fourth quarter.
- Recurring Revenue: Comprised 91% of total revenue, returning to growth during the quarter.
- Nonrecurring Project Revenues: Down $13 million or 17%.
- Adjusted EBITDA: $217 million with margins expanded to 31.9%.
- Operating Cash Flow: $342 million, adjusted for onetime transaction and separation costs.
- ARR Bookings: $114 million for 2024, an 18% improvement over 2023.
- Revenue Under Contract: $2.1 billion for 2025, $1.5 billion for 2026, and $1.2 billion for 2027.
- Cash and Cash Equivalents: $343 million at quarter end.
- Total Debt: $2 billion, down from $2.8 billion at the start of 2024.
- Net Leverage Ratio: 2.8x at year-end, improved from 3.3x at the start of 2024.
- Share Repurchases: $12 million worth of shares repurchased in the fourth quarter; $167 million returned to shareholders for the year.
- Share Buyback Authorization: Increased by $200 million, totaling $281 million.
- Quarterly Cash Dividend: $0.04 declared.
- 2025 Revenue Outlook: $2.32 billion to $2.39 billion, or negative 1.5% to positive 1.5% growth.
- 2025 Adjusted EBITDA Outlook: $620 million to $645 million with margin expansion of 150 to 180 basis points.
- 2025 Adjusted EPS Outlook: $0.58 to $0.64.
- 2025 Free Cash Flow Outlook: $250 million to $285 million, growth of 13% to 29%.
- 2025 ARR Bookings Outlook: $130 million to $145 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alight Inc (ALIT, Financial) reported strong growth in recurring revenue, with a significant increase in ARR bookings and robust cash flow.
- The company completed its cloud migration, which has improved operational stability and efficiency.
- Alight Inc (ALIT) announced a $200 million increase to its share repurchase authorization, reflecting confidence in its financial health.
- The company achieved an 18% increase in ARR bookings for 2024, indicating strong demand for its solutions.
- Retention rates improved by 8 points in the most recent renewal cycle, returning to near historical levels.
Negative Points
- Nonrecurring project revenues were down 17%, indicating challenges in this segment.
- The company anticipates a temporary impact on revenue growth due to historical losses from 2023.
- Alight Inc (ALIT) maintains a cautious view on the nonrecurring project environment, with no improvement in client demand.
- The company expects revenue growth to be bounded in the short term due to loss impacts from 2023.
- There is a cautious outlook on participant counts, with expectations of 0% to 1% growth, which is lower than historical levels.
