DA Davidson Reaffirms ‘Buy’ on Alight (ALIT), Price Target Held at $10
Alight (ticker: ALIT) is getting attention again. On July 26, 2025, DA Davidson, a well-known investment firm, repeated its ‘Buy’ rating for the company. They also kept the price target at $10. That means they believe the stock has room to grow.
Why does this matter? Because when experts speak, markets listen. Alight is not just any company; it helps big businesses manage HR, payroll, and employee benefits using modern tech. With more firms going digital, Alight’s services are in demand.
Let’s check what this rating means. Is Alight a smart pick right now? What are its strengths? And what’s next for this growing tech firm?
About Alight (ALIT)
Alight, Inc., based in Chicago, offers cloud‑based services for HR, payroll, benefits, and retirement planning. It supports large firms across the U.S. and Canada. The company went public in July 2021 and today employs around 10,000 people.
It became known for its Worklife platform that blends employee benefits, financial well-being tools, and automation. Over time, it added services like retirement planning, leave management, and analytics, often through acquisitions such as NGA Human Resources and Hodges-Mace.
DA Davidson’s Analyst Views
On July 21, 2025, DA Davidson reaffirmed its Buy rating on ALIT stock and held its price target at $10. The firm’s analyst, Peter Heckmann, sees strong fundamentals in Alight. He noted that Alight’s Q1 2025 revenue and adjusted EBITDA exceeded DA Davidson’s estimates by roughly 2 % and 3 % respectively.
The analyst emphasizes the high recurring revenue base, strong client renewals, and effective cost control. DA Davidson expects full‑year 2025 guidance to remain intact after Q2 results are released.
Stock Performance Snapshot
Alight’s share price is hovering near $5.75, which is less than its $10 target and suggests roughly 80 % upside. Over the past year, the stock dropped by about 24 %, trading in a range from around $4.5 to $8.9. Analysts currently label ALIT a Moderate Buy, with six out of seven firms rating it a buy and a consensus price target near $9.86.
Financial Highlights
In Q1 2025, Alight posted $548 million in revenue, down 2 % year‑over‑year. The net loss improved to about $17 million, versus a $121 million loss a year earlier. Adjusted EBITDA rose to $118 million, while free cash flow hit $44 million.
Nearly 92 % of projected full-year revenue was already under contract. That gives revenue visibility and helps shield the firm from market ups and downs. Alight reaffirmed its full-year outlook: revenue between $2.32 and $2.39 billion, adjusted EBITDA of $620 to $645 million.
Market and Investor Reaction
The DA Davidson reaffirmation came just before the Q2 earnings season. Analysts see it as a vote of confidence. Shares have been trading below peer valuations. While sentiment remains cautious, confidence stems from management guidance and recurring contract revenue. Insider buying also boosted sentiment. A company director recently bought 50,000 shares at about $5.69, hinting at internal confidence.
What’s Next for Alight?
The key near‑term catalyst is the Q2 2025 earnings release. Alight plans to report the results before market open on August 5, followed by a webcast at 8:30 a.m. ET. Analysts expect the results to meet or modestly beat expectations. Annual EPS is projected at around $0.61, which would mark a shift to profitability for the year.
Strategically, Alight recently named David Essary as Chief Strategy Officer. Essary will lead M&A and product strategy to grow both Alight’s platform and services suite. The company also appointed Donna Dorsey as Chief Human Resources Officer, a move meant to enhance talent and culture as Alight scales.
Analyst Consensus Beyond DA Davidson
Other analysts agree ALIT has upside. Wedbush maintains an Outperform rating with a $9 target. Most analysts’ targets span $8 to $11, with a consensus average around $9.86 to $10.75. This shows wide agreement that the stock is undervalued compared to its recurring revenue model and cloud services peers.
Risks to Watch
We must mention some risks. Revenue from one‑time projects remains weak amid macro pressures. Alight carries significant debt. A prolonged downturn could strain margins. But management is working to reduce leverage by paying down hundreds of millions in debt. The company also supports shareholder returns. It recently repurchased $20 million in shares and pays a quarterly $0.04 dividend (about a 2.8 % yield).
Wrap Up
We see DA Davidson’s reaffirmation of its Buy rating and $10 target as a strong sign. Alight has steady recurring revenue, cost discipline, and a strategy built on AI-driven HR tech. While the market remains cautious, analyst response is solid. If Q2 results meet expectations and contract wins hold, ALIT may close much of its valuation gap. For long-term investors, Alight could offer real value in a growing sector.
Frequently Asked Questions (FAQ)
DA Davidson has set a $10.00 price target for Alight Solutions (ticker ALIT). They continue to rate it a “Buy,” expecting healthy upside from the current share price.
As of late July 2025, Alight Solutions has a market capitalization of around $3.0 billion, which reflects the total value of its publicly traded shares.
Disclaimer:
This is for information only, not financial advice. Always do your research.