10 Most Undervalued Penny Stocks to Buy According to Hedge Funds

Page 9 of 9

1. Alight Inc. (NYSE:ALIT)

Share Price as of April 18: $4.99

Forward P/E ratio as of April 18: 8.35

Number of Hedge Fund Holders: 42

Alight Inc. (NYSE:ALIT) is a technology-enabled services company that provides Alight Worklife, which is an intuitive, cloud-based employee engagement platform. Its platform services include integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, and retiree healthcare.

The company’s Recurring Revenue made up 91% of its Q4 2024 revenue. Alight saw recurring revenue grow sequentially in Q4 and aims for a 4% to 6% long-term revenue increase, which is fueled by ARR Bookings. Alight achieved $114 million in total ARR bookings in 2024, which is an 18% increase from 2023. It expects $130 to $145 million in ARR bookings for 2025, with a sales pipeline up 54%. The company also saw an 8% increase in client retention rates in its last renewal cycle.

For 2025, Alight Inc. (NYSE:ALIT) expects recurring revenue to grow about 1% overall. Alight’s long-term TAM is projected at a substantial $50 billion. With that opportunity, the company aims for a total annual revenue growth of 4% to 6% by 2027. Needham analyst Kyle Peterson reaffirmed a Buy rating on the stock with a $9 price target in March.

While we acknowledge the growth potential of Alight Inc. (NYSE:ALIT), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ALIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 9 of 9