Comparing Alight (NYSE:ALIT) & Upwork (NASDAQ:UPWK)

Upwork (NASDAQ:UPWK) and Alight (NYSE:ALIT) are both small-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Valuation and Earnings

This table compares Upwork and Alight”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upwork	$787.78 million	1.33	$115.43 million	$0.77	10.86
Alight	$2.26 billion	0.11	-$3.10 billion	($77.18)	-0.12

Upwork has higher earnings, but lower revenue than Alight. Alight is trading at a lower price-to-earnings ratio than Upwork, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.7% of Upwork shares are owned by institutional investors. Comparatively, 96.7% of Alight shares are owned by institutional investors. 4.9% of Upwork shares are owned by company insiders. Comparatively, 2.1% of Alight shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Upwork and Alight, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upwork	1	9	3	0	2.15
Alight	2	3	3	0	2.12

Upwork presently has a consensus target price of $13.05, suggesting a potential upside of 56.10%. Alight has a consensus target price of $49.33, suggesting a potential upside of 443.56%. Given Alight’s higher possible upside, analysts clearly believe Alight is more favorable than Upwork.

Risk & Volatility

Upwork has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Alight has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.

Profitability

This table compares Upwork and Alight’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Upwork	12.94%	16.70%	7.94%
Alight	-90.90%	16.05%	4.38%

Summary

Upwork beats Alight on 9 of the 13 factors compared between the two stocks.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.

About Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.