Alight, Inc. (NYSE:ALIT) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a good week for Alight, Inc. (NYSE:ALIT) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.7% to US$5.57. Revenues of US$548m arrived in line with expectations, although statutory losses per share were US$0.03, an impressive 54% smaller than what broker models predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Following last week's earnings report, Alight's six analysts are forecasting 2025 revenues to be US$2.35b, approximately in line with the last 12 months. Losses are expected to increase substantially, hitting US$0.08 per share. Before this earnings announcement, the analysts had been modelling revenues of US$2.35b and losses of US$0.11 per share in 2025. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a considerable decrease in losses per share in particular.

See our latest analysis for Alight

The consensus price target fell 5.5% to US$9.57despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alight, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$8.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2025. Historically, Alight's top line has shrunk approximately 1.6% annually over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.9% per year. So it's pretty clear that, although revenues are improving, Alight is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Alight going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Alight that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.