Alight, Inc. / Delaware (NYSE: ALIT)

Sector: Technology Industry: Software - Application CIK: 0001809104
Market Cap 877.60 Mn
P/B 0.44
P/E -0.41
P/S 0.38
ROIC (Qtr) -42.35
Div Yield % 12.05
Rev 1y % (Qtr) -3.96
Total Debt (Qtr) 2.01 Bn
Debt/Equity (Qtr) 1.00

About

Alight, Inc., a prominent company in the human capital management sector, is publicly recognized by the ticker symbol "ALIT" on the New York Stock Exchange. The company's main business activities involve providing comprehensive human capital management solutions to some of the world's most intricate companies. Alight has a significant global presence, with operations in the Americas, Europe, and Asia, and competes in a dynamic industry alongside notable competitors such as Accenture, Accolade, ADP, and many others. Alight's primary source of revenue...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 205M provide 10.25x coverage of short-term debt 20M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 354M provides strong 11.42x coverage of stock compensation 31M, indicating sustainable incentive practices.
  • Robust free cash flow of 243M exceeds capital expenditure of 111M by 2.19x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 2.01B provides 11.34x coverage of working capital 177M, indicating strong operational backing.
  • Cash position of 205M represents healthy 1.16x of working capital 177M, demonstrating strong operational liquidity.

Bear case

  • Operating cash flow of 354M barely covers its investment activities of (128M), with a coverage ratio of -2.77, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 354M provides thin coverage of dividend payments of (86M) with a -4.12 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 205M provide limited coverage of acquisition spending of (17M), which is -12.06x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of (2.25B) show weak coverage of depreciation charges of 413M, with a -5.44 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 354M provides minimal -1.99x coverage of tax expenses of (178M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Subsegments Breakdown of Revenue (2024)

Subsegments Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.48 2.65
EV to Cash from Ops. EV/CFO 7.53 13.37
EV to Debt EV to Debt 1.33 57.69
EV to EBIT EV/EBIT -1.19 19.12
EV to EBITDA EV/EBITDA -1.42 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 10.97 14.69
EV to Market Cap EV to Market Cap 3.04 -92.28
EV to Revenue EV/Rev 1.16 4.60
Price to Book Value [P/B] P/B 0.44 4.26
Price to Earnings [P/E] P/E -0.41 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -25.08 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) -3.90 4.25
Dividend per Basic Share Div per Share (Qtr) 0.16 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 35.48 2.52
Interest Coverage Int. cover (Qtr) -25.53 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 8.26 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -31.67 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -860.74 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -717.38 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -912.16 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -594.94 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -547.62 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 64.19 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.38 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.41 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.02
Cash Ratio Cash Ratio (Qtr) 0.25 3.75
Current Ratio Curr Ratio (Qtr) 1.21 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 1.00 0.17
Interest Cover Ratio Int Coverage (Qtr) -25.53 -52.32
Times Interest Earned Times Interest Earned (Qtr) -25.53 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -80.10 -100.06
EBIT Margin % EBIT Margin % (Qtr) -98.17 -164.24
EBT Margin % EBT Margin % (Qtr) -102.01 -116.94
Gross Margin % Gross Margin % (Qtr) 34.80 58.20
Net Profit Margin % Net Margin % (Qtr) -94.20 -121.65