Critical Review: Alight (NYSE:ALIT) versus DLocal (NASDAQ:DLO)

Alight (NYSE:ALIT) and DLocal (NASDAQ:DLO) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

Alight has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, DLocal has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Alight and DLocal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alight	0	0	7	0	3.00
DLocal	0	5	3	0	2.38

Alight presently has a consensus price target of $12.71, suggesting a potential upside of 40.64%. DLocal has a consensus price target of $19.13, suggesting a potential upside of 22.44%. Given Alight’s stronger consensus rating and higher probable upside, analysts plainly believe Alight is more favorable than DLocal.

Earnings and Valuation

This table compares Alight and DLocal’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alight	$3.41 billion	1.49	-$345.00 million	($0.55)	-16.44
DLocal	$650.35 million	7.11	$148.96 million	$0.49	31.88

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

Institutional and Insider Ownership

96.7% of Alight shares are owned by institutional investors. Comparatively, 90.1% of DLocal shares are owned by institutional investors. 4.0% of Alight shares are owned by company insiders. Comparatively, 45.4% of DLocal shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alight	-7.80%	5.09%	2.30%
DLocal	22.92%	40.57%	17.13%

Summary

DLocal beats Alight on 8 of the 13 factors compared between the two stocks.

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.

About DLocal

DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.