Alight (ALIT) Declined on Lower-Than-Expected New Customer Bookings
Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -9.91% (net) compared to a -6.84% return for the Russell 2500 Growth Index. The firm’s investment process prioritizes the management of risk over the opportunity for a return. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Meridian Growth Fund highlighted stocks like Alight, Inc. (NYSE:ALIT) in the third quarter 2023 investor letter. Headquartered in Lincolnshire, Illinois, Alight, Inc. (NYSE:ALIT) is a cloud-based integrated digital human capital and business solutions provider. On December 5, 2023, Alight, Inc. (NYSE:ALIT) stock closed at $7.86 per share. One-month return of Alight, Inc. (NYSE:ALIT) was 11.49%, and its shares lost 8.60% of their value over the last 52 weeks. Alight, Inc. (NYSE:ALIT) has a market capitalization of $4.312 billion.
Meridian Growth Fund made the following comment about Alight, Inc. (NYSE:ALIT) in its Q3 2023 investor letter:
"Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology provider of enterprise-level software that helps businesses and their employees manage critical human resources functions. Through its investments in software and automation, Alight has built a distinct advantage that allows its customers to deliver HR services at a much lower cost while providing a better experience for their employees. The stock lagged during the quarter primarily due to the firm’s lower-than-expected new customer bookings, which declined year-over-year after an incredibly strong 2022. Another factor holding back the stock was its middling free cash flow generation, which limited the company’s ability to pay down debt as fast as investors had hoped. Even in the face of lower bookings, we still believe the company will be able to generate mid to high single digit revenue growth for years to come. We also believe that the company’s debt risk is lower than the market has priced in. High customer retention rates translate into resilient and predictable revenue, and largely fixed interest rates on its debt have insulated the company from rising rates. Ultimately, we believe Alight’s continued investments in superior technology, automation, and customer experience, and its ability to deliver critical services at a lower cost of ownership, will lead to further revenue growth and profitability. We added to our position during the period."
A businessman shaking hands with a client, representing the trust placed in the top-quality services offered by the company.
Alight, Inc. (NYSE:ALIT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Alight, Inc. (NYSE:ALIT) at the end of third quarter which was 32 in the previous quarter.
We discussed Alight, Inc. (NYSE:ALIT) in another article and shared billionaire Louis Bacon’s stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
