CHICAGO - Alight, Inc. (NYSE: ALIT), a prominent provider of cloud-based human capital technology and services, announced that Cannae Holdings (NYSE:CNNE) has sold 12 million shares of Alight's common stock. The transaction, completed on Tuesday, was executed to meet Cannae's liquidity requirements. According to InvestingPro data, Alight currently trades at an enterprise value to EBITDA multiple of 12.8x, with analysts setting price targets ranging from $8 to $13 per share. Despite the share sale, management has been actively buying back shares, suggesting confidence in the company's valuation.
Cannae Holdings, which does not generate operating income, periodically sells assets to generate cash for strategic purposes. According to William P. Foley, II, Chairman of the Board for both Cannae and Alight, this recent sale fulfilled Cannae's immediate cash needs, and there are no plans for further sales of Alight stock in the near future.
Foley reaffirmed Cannae's strong belief in Alight's long-term financial prospects and business strategy, emphasizing that the sale should not be interpreted as a loss of confidence in Alight's future.
Alight Solutions serves numerous large organizations globally, administering employee benefits and offering a platform that supports employers in understanding and engaging with their workforce. Alight Worklife® is designed to enhance employee wellbeing, engagement, and productivity through personalized benefits management and data-driven insights. The company has demonstrated strong revenue growth, with InvestingPro analysis showing a 26.9% increase in revenue over the last twelve months to $3.36 billion. Get deeper insights into Alight's performance metrics and growth potential with InvestingPro's comprehensive research report, part of its coverage of over 1,400 US stocks.
The company's press release also contained forward-looking statements, which are predictions based on current expectations and could be affected by risks and uncertainties. These statements, which include words like "expects," "anticipates," and "believes," are not guarantees of future performance and should be considered with caution. Potential investors are advised to review the company's filings with the SEC, which detail various risk factors and are available on the SEC's website.
The sale of shares is a strategic move by Cannae to support its liquidity needs and does not indicate a change in the company's outlook on Alight's performance. This news is based on a press release statement from Alight Solutions.
In other recent news, Alight Solutions reported a slight increase in revenue for Q3 2024, bolstered by improved BPaaS growth and project revenue. The company also saw an 8%-9% sequential expansion in contracted revenue. Citi maintained a Buy rating on Alight shares, reflecting confidence in the company's fiscal direction. Needham, another financial analyst firm, raised its price target for Alight from $9 to $11, maintaining its Buy rating as well.
Alight's recent divestiture and recapitalization of Sparta, and the completion of its cloud migration, were highlighted as positive developments. The company's shift towards recurring revenue, which now constitutes 91% of total revenue, was another notable development. Alight also provided Q4 guidance that aligns with consensus estimates, and announced a new quarterly dividend of $0.04 per share.
The company's client acquisitions in Q3, including Hewlett Packard Enterprise (NYSE:HPE), Nokia (HE:NOKIA), and Siemens (ETR:SIEGn), and a 60% increase in its sales pipeline, suggest potential for growth and deeper client engagement. These are among the recent developments that have shaped Alight's current business trajectory.
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