ALIT - Alight: Rate Of Capital Deployment Likely Won't Unlock Economic Value
2024-07-11 18:16:01 ET
Summary
- Alight has incurred substantial losses for shareholders since listing via SPAC merger in FY'21.
- It sells at 0.8x book capital, but this is not a statistical discount due to low ROICs and contracting profit per employee.
- Implied value is also heavily tied to multiple vs. forward-looking fundamentals.
Investment Thesis
Based in Lincolnshire, Illinois, Alight, Inc. ( ALIT ) is in the human resources ("HR") business. Its flagship platform, Alight Worklife , integrates AI and data analytics, forming its "business process as a service" ("BPaaS") model—a take on the Software-as-a-Service ("SaaS") models that have been in existence for some time now. The business model focuses on human capital management, with the bulk of customers using the platform for cybersecurity and insurance. The company holds an estimated 0.15% market share of the human capital management domain....
Alight: Rate Of Capital Deployment Likely Won't Unlock Economic Value