Update shared on 07 Nov 2025
Fair value Decreased 4.95%Analysts have lowered their price target for Alight from $11.00 to $8.50, citing recent delays in growth acceleration. This comes despite ongoing increases in the company’s backlog and continued confidence in margin expansion.
Analyst Commentary
Recent analyst perspectives highlight a mix of optimism and caution concerning Alight's valuation and growth trajectory. The following summarizes key points from recent Street research:
Bullish Takeaways
- Bullish analysts point to Alight's continued backlog growth, which suggests strong underlying demand for its services.
- There is maintained confidence in the company’s ability to expand margins, which indicates potential for improved profitability going forward.
- The Buy rating on shares signals belief in the long-term strength and execution of Alight’s business model, despite near-term setbacks.
- An adjustment in valuation multiple is viewed as a recalibration rather than a fundamental change in outlook. This reflects prudence in response to execution delays.
Bearish Takeaways
- Bearish analysts emphasize the recent delays in growth acceleration, which have prompted a reduction in the stock's valuation multiple.
- Concerns persist regarding the timeline to realize significant revenue growth. This creates uncertainty about the pace of future improvement.
- The lowered price target reflects cautious sentiment about Alight's near-term performance versus prior expectations.
- Potential downside risks remain if backlog translation into actual revenue or margin progress proves slower than anticipated.
What's in the News
- Alight completed a share repurchase of 6.58 million shares between July and September 2025. This amounted to 8.04% of shares repurchased for $284.47 million under its ongoing buyback program (Key Developments).
- The company issued earnings guidance for 2025, projecting revenue in the range of $2,252 million to $2,282 million (Key Developments).
- Alight reported a goodwill impairment of $1,338 million for the three months ended September 30, 2025 (Key Developments).
- The Board of Directors approved declassifying the Board and plans to put the proposal to a stockholder vote at the 2026 annual meeting in response to calls for improved accountability (Key Developments).
- Alight and IBM expanded their collaboration to integrate AI-powered solutions into Alight's offerings, with a focus on digital transformation, employee benefits support, and productivity. Pilot implementations are scheduled for 2026 (Key Developments).
Valuation Changes
- Fair Value decreased slightly from $7.21 to $6.86 per share.
- Discount Rate rose modestly from 9.39% to 9.99%.
- Revenue Growth projections declined from 2.00% to 1.49%.
- Net Profit Margin estimates fell from 8.12% to 7.01%.
- Future P/E ratio increased from 24.56x to 26.82x.
Disclaimer
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