Alight (ALIT): Evaluating Valuation After Strategic Expansion into AI-Powered Health Benefits with Sword Health Collaboration

Alight (ALIT) recently partnered with Sword Health to bring advanced musculoskeletal and mental health solutions into its platform. This move signals a clear emphasis on AI-powered, personalized employee benefits and broader healthcare tools for clients.

See our latest analysis for Alight.

Alight’s new partnership follows a period of strategic shifts, including the recent divestment of certain units and an increased focus on AI-powered employee benefits with fresh collaborations such as Sword Health and Goldman Sachs. While the stock’s 1-year total shareholder return dipped by about 0.5%, momentum could pick up as these changes take root and the company works towards its medium-term growth targets.

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With shares down more than 50% over the past year and analysts still projecting significant upside, the question is whether Alight is an undervalued opportunity or if the market has already accounted for its long-term growth prospects.

Most Popular Narrative: 60% Undervalued

With Alight’s fair value narrative sitting well above the last close of $3.27, analysts clearly see more upside than what the market currently prices in.

Expanding partnerships, such as the new alliance with Goldman Sachs Asset Management, are expected to unlock new recurring revenue streams (for example, wealth management products) and broaden Alight's addressable market. This may contribute to future revenue growth. The ongoing shift to high-margin, cloud-based, recurring revenue models (over 93% of revenue is now recurring), along with increased wallet share from service expansions in large client renewals, is likely to support revenue stability and further margin expansion over time.

Read the complete narrative.

Curious how recurring revenues and partnerships power these bold price targets? The full narrative reveals which growth levers and future profit margins drive this aggressive valuation, but only those who dive in will see the numbers for themselves. Don’t miss out on what analysts are projecting beneath the surface.

Result: Fair Value of $8.21 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slow new business signings or continued project delays could put pressure on revenue and challenge the optimistic growth outlook for Alight in coming quarters.

Find out about the key risks to this Alight narrative.

Build Your Own Alight Narrative

If you want to put the numbers to the test or prefer to shape your own outlook, you can build your own Alight narrative in just a few minutes. Do it your way with Do it your way.

A great starting point for your Alight research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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