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We feel now is a pretty good time to analyse Alight, Inc.'s (NYSE:ALIT) business as it appears the company may be on the cusp of a considerable accomplishment. Alight, Inc. provides cloud-based integrated digital human capital and business solutions in the United States and internationally. The company’s loss has recently broadened since it announced a US$62m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$119m, moving it further away from breakeven. As path to profitability is the topic on Alight's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Alight
According to the 7 industry analysts covering Alight, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$43m in 2024. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 95% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Alight's upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Alight currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Alight's case is 57%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Alight, so if you are interested in understanding the company at a deeper level, take a look at Alight's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
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Valuation: What is Alight worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Alight is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Alight’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.