Why do you advise against *lossless* formats like FLAC/ALAC?
There are a couple of claims made, without evidence.
1 - The decompression time, which is variable, can cause audible effects.
2 - The extra CPU time involved in decompression adds noise to the circuit.
Personally I have heard no such effects, nor have I seen anyone measure it, which seems quite easy to do.
If this actually happens it is probably quite DAC and streamer dependent.