Critical Comparison: Edgio (NASDAQ:EGIO) versus Alight (NYSE:ALIT)

Alight (NYSE:ALIT) and Edgio (NASDAQ:EGIO) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Institutional and Insider Ownership

96.7% of Alight shares are held by institutional investors. Comparatively, 23.2% of Edgio shares are held by institutional investors. 5.3% of Alight shares are held by company insiders. Comparatively, 2.6% of Edgio shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Alight has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Edgio has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alight	-6.58%	5.42%	2.36%
Edgio	N/A	N/A	N/A

Valuation and Earnings

This table compares Alight and Edgio”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alight	$3.36 billion	1.22	-$345.00 million	($0.62)	-11.81
Edgio	$403.59 million	0.00	-$136.52 million	($25.60)	N/A

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

Analyst Ratings

This is a summary of current ratings and price targets for Alight and Edgio, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alight	0	1	9	0	2.90
Edgio	0	1	0	0	2.00

Alight currently has a consensus target price of $10.75, suggesting a potential upside of 46.86%. Edgio has a consensus target price of $10.00, suggesting a potential upside of ∞. Given Edgio’s higher probable upside, analysts clearly believe Edgio is more favorable than Alight.

Summary

Alight beats Edgio on 9 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 Edgio

Edgio, Inc. provides edge-enabled software solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates private global networks with distributed computing resources and extensive connectivity to last-mile broadband network providers; offers live and on-demand video delivery services; and provides platform, media, and application solutions. It also offers cloud security, edge compute, origin storage, and support services. In addition, the company provides content delivery, video content management, and streaming services, performance services for website and web application and security; professional services, cloud storage, and edge computing services. The company was formerly known as Limelight Networks, Inc. and changed its name to Edgio, Inc. in June 2022. Edgio, Inc. was founded in 2001 and is headquartered in Phoenix, Arizona.