Investors are weighing the merits of two technology companies, Alight (NYSE: ALIT) and Braze (NASDAQ: BRZE), as potential investment opportunities. A detailed comparison of their financial metrics, ownership structure, and analyst recommendations reveals distinct differences that could influence investment decisions.
Institutional Ownership and Insider Stakes
Alight boasts a strong institutional ownership, with 96.7% of its shares held by institutional investors. This suggests a high level of confidence from large financial entities in Alight’s potential for long-term growth. In contrast, Braze has 90.5% of its shares owned by institutional investors, indicating robust institutional interest but slightly less than Alight.
Additionally, insider ownership tells a different story. Only 1.9% of Alight’s shares are held by company insiders, whereas 18.2% of Braze’s shares are owned by insiders. This higher insider ownership could indicate greater confidence from those directly involved in Braze’s operations and decision-making.
Financial Performance and Valuation
A thorough examination of earnings and valuation metrics shows that while Braze has lower revenue compared to Alight, it demonstrates higher earnings per share. This positions Braze as a potentially more lucrative option for investors, especially given that it trades at a lower price-to-earnings ratio. This lower ratio suggests that Braze may be undervalued relative to Alight, making it an attractive buy for those looking for growth at a reasonable price.
Analysts have rated both companies with varied price targets. Alight’s consensus price target stands at $6.25, indicating a potential upside of 192.74%. Conversely, Braze has a price target of $45.11, reflecting a potential upside of 67.18%. These figures suggest that, from an analyst’s perspective, Alight presents a higher potential return despite its lower earnings.
Profitability and Risk Assessment
In terms of profitability, the companies differ as well. Alight’s net margins, return on equity, and return on assets need to be analyzed to determine its financial health against Braze. Furthermore, volatility is a crucial factor for investors. Alight has a beta of 1.02, meaning its stock is roughly 2% more volatile than the S&P 500. On the other hand, Braze shows a beta of 1.1, indicating a 10% higher volatility compared to the market index. This information is vital for risk-averse investors.
Company Profiles
Alight, Inc., founded in 2020 and headquartered in Lincolnshire, Illinois, specializes in cloud-based integrated digital human capital and business solutions. Their offerings include employee wellbeing services and AI-led capabilities software. The company aims to enhance employee engagement through its platform, Alight Worklife, which helps organizations foster a high-performance culture.
In contrast, Braze, Inc., incorporated in 2011 and based in New York, focuses on customer engagement through its digital platform. The company provides a suite of tools for brands to manage interactions with consumers, including mobile notifications and personalized experiences. Braze’s comprehensive data transformation and segmentation capabilities allow brands to optimize their marketing strategies.
Overall, both Alight and Braze present unique investment profiles. While Alight offers a higher potential upside according to analysts, Braze demonstrates stronger earnings and a more favorable valuation. Investors must weigh these factors against their own financial goals and risk tolerance when considering investment in either company.
