1) Alight, Inc. (NYSE:ALIT)
Share Price as of November 26: $8.02
Number of Hedge Fund Holders: 40
Alight, Inc. (NYSE:ALIT) is a leading cloud-based provider of integrated digital human capital and business solutions. Alight, Inc. (NYSE:ALIT) remains optimistic about its operational momentum heading into 2025. While the company expects full-year adjusted EBITDA of between $585 million – $610 million, it expects annual recurring revenue (ARR) bookings to grow by double digits in the latter half of the year. Alight, Inc. (NYSE:ALIT) expects a recovery in demand as it expands its client base. The company announced some critical wins in Q3 2024, with major clients like Hewlett Packard Enterprise, Nokia, and Siemens, indicating healthy market momentum.
Alight, Inc. (NYSE:ALIT) completed its cloud migration, which should drive ongoing savings and improve user experience. The company’s new cloud-based foundation creates a connected ecosystem that drives innovation, enhances availability and security, and improves performance, all within a streamlined infrastructure. The transition is expected to result in $75 million of annualized savings.
Alight, Inc. (NYSE:ALIT) is now well-positioned to deliver enhanced performance and increased capacity throughout the Alight Worklife platform. The company expects strong demand for its integrated platform, which should drive user engagement and experience. Alight, Inc. (NYSE:ALIT)’s go-to-market strategy has been enhanced, with a strong focus on enterprise sellers and domain experts.
Polen Capital, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“We exited four positions during the quarter, including SiTime, AppFolio, RH, Doximity, and Alight, Inc. (NYSE:ALIT). Our position in Alight, a benefits outsourcing and business process-as-a-service company, was an unsuccessful investment. We decided to move on due to activist pressure that led to a breakup of the business. We were dissatisfied with both the plan and the new standalone business. This culminated with the CEO leaving and uncertainty over the company’s long-term strategic direction. As a result, we felt it was time to move on with better investment ideas in our pipeline.”
While we acknowledge the potential of ALIT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.
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