13 Best Growth Stocks Under $10 to Buy

2. Alight, Inc. (NYSE:ALIT)

Number of Hedge Fund Holders: 42

Alight, Inc. (NYSE:ALIT) provides integrated, cloud-based human capital solutions that enable clients and workers to manage their health, financial, and HR needs. Geographically, the US is where the company makes the most of its revenue.

Alight’s financial profile has improved as a result of the sale of its professional services and payroll operations. Gross margins have increased by 350 basis points to over 40%, and adjusted EBITDA margins have increased from 21.7% to 25%. Additionally, the firm finished its two-year cloud migration initiative, which is anticipated to save $75 million in run-rate costs annually and increase margins.

Due to the completion of its cloud conversion and a 350 basis point increase in margin from its divestment, ALT announced impressive financial achievements for the second quarter of 2024. Due to a $740 million debt reduction and a $155 million share repurchase announcement, net leverage dropped to 2.8x. ARR (annual recurring revenue) bookings increased by 9% year over year, and sales were $550 million with adjusted EBITDA of $128 million.

Alight, Inc. (NYSE:ALIT), whose long-term contracts account for more than 90% of total revenue, projects steady revenue growth of 4% to 6% each year. It is one of the best growth stocks under $10 to take into consideration because of the company’s excellent revenue model, strong margins, and cost efficiencies.

For Alight, Inc., Kyle Peterson, an analyst, continues to retain a Buy rating because of the company’s return to core competencies, cost-cutting measures, and improved financial condition after the divestiture. According to them, the company is fairly valued and offers GARP investors a good risk-reward profile.

Jeffrey Smith’s Starboard Value LP is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 43,395,000 shares worth $320.26 million as of Q2.