NasdaqGS:ALGN

Stock Analysis Report

Executive Summary

Align Technology, Inc., a medical device company, designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontics, and restorative and aesthetic dentistry worldwide.

Rewards

Trading at 39.6% below its fair value

Earnings are forecast to grow 5.82% per year

Earnings grew by 10.6% over the past year

Risk Analysis

No risks detected for ALGN from our risk checks.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has Align Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ALGN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

ALGN

1.1%

US Medical Equipment

0.5%

US Market


1 Year Return

9.2%

ALGN

21.9%

US Medical Equipment

20.3%

US Market

Return vs Industry: ALGN underperformed the US Medical Equipment industry which returned 21.9% over the past year.

Return vs Market: ALGN underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

ALGNIndustryMarket
7 Day1.3%1.1%0.5%
30 Day-1.3%0.4%2.0%
90 Day1.8%8.3%9.4%
1 Year9.2%9.2%22.9%21.9%22.8%20.3%
3 Year174.2%174.2%82.5%77.4%50.1%40.4%
5 Year393.5%393.5%116.4%93.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is Align Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Align Technology undervalued compared to its fair value and its price relative to the market?

39.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ALGN ($277.15) is trading below our estimate of fair value ($458.63)

Significantly Below Fair Value: ALGN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ALGN is poor value based on its PE Ratio (49.7x) compared to the Medical Equipment industry average (47.5x).

PE vs Market: ALGN is poor value based on its PE Ratio (49.7x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: ALGN is poor value based on its PEG Ratio (8.5x)


Price to Book Ratio

PB vs Industry: ALGN is overvalued based on its PB Ratio (16.2x) compared to the US Medical Equipment industry average (4.1x).


Next Steps

Future Growth

How is Align Technology forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

5.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALGN's forecast earnings growth (5.8% per year) is above the savings rate (1.7%).

Earnings vs Market: ALGN's earnings (5.8% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: ALGN's earnings are forecast to grow, but not significantly.

Revenue vs Market: ALGN's revenue (15.5% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: ALGN's revenue (15.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ALGN's Return on Equity is forecast to be high in 3 years time (38.3%)


Next Steps

Past Performance

How has Align Technology performed over the past 5 years?

25.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ALGN has high quality earnings.

Growing Profit Margin: ALGN's current net profit margins (18.4%) are lower than last year (20.4%).


Past Earnings Growth Analysis

Earnings Trend: ALGN's earnings have grown significantly by 25.7% per year over the past 5 years.

Accelerating Growth: ALGN's earnings growth over the past year (10.6%) is below its 5-year average (25.7% per year).

Earnings vs Industry: ALGN earnings growth over the past year (10.6%) exceeded the Medical Equipment industry 7.1%.


Return on Equity

High ROE: ALGN's Return on Equity (32.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Align Technology's financial position?


Financial Position Analysis

Short Term Liabilities: ALGN's short term assets ($1.6B) exceed its short term liabilities ($971.0M).

Long Term Liabilities: ALGN's short term assets ($1.6B) exceed its long term liabilities ($183.6M).


Debt to Equity History and Analysis

Debt Level: ALGN is debt free.

Reducing Debt: ALGN has not had any debt for past 5 years.

Debt Coverage: ALGN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ALGN has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ALGN has a high level of physical assets or inventory.

Debt Coverage by Assets: ALGN's debt is not covered by short term assets (assets are -119.2x debt).


Next Steps

Dividend

What is Align Technology's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ALGN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ALGN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ALGN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ALGN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ALGN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Joe Hogan (62yo)

4.7yrs

Tenure

US$41,758,338

Compensation

Mr. Joseph M. Hogan, also known as Joe, has been Chief Executive Officer and President of Align Technology, Inc. since June 01, 2015. Mr. Hogan serves as a Senior Advisor of ABB Ltd at ABB S.A. He served a ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD41.76M) is above average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Joe's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Hogan
President4.7yrsUS$41.76m0.20% $41.9m
John Morici
CFO & Senior VP of Global Finance3.3yrsUS$3.36m0.0074% $1.6m
Emory Wright
Senior Vice President of Global Operations12.2yrsUS$3.15m0.032% $6.8m
Zelko Relic
CTO and Senior VP of Global Research & Development2yrsUS$3.08m0.035% $7.4m
Shirley Stacy
Vice President of Corporate Communications & Investor Relations0yrsno datano data
Julie Coletti
Senior VP and Chief Legal & Regulatory Officer0.8yrsno data0.00047% $100.0k
Vamsi Pudipeddi
Senior VP & Chief Marketing1yrsno data0.0014% $297.8k
Stuart Hockridge
Senior Vice President of Global Human Resources3.8yrsUS$3.35m0.00016% $34.0k
Julie Tay
Senior VP & MD of Asia Pacific6.9yrsno data0.014% $3.1m
Simon Beard
MD for Americas Region & Senior VP4.3yrsno data0.017% $3.7m

3.8yrs

Average Tenure

52yo

Average Age

Experienced Management: ALGN's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joseph Hogan
President4.7yrsUS$41.76m0.20% $41.9m
Joseph Lacob
Independent Director22.5yrsUS$365.05k0.23% $49.5m
Gregory Santora
Independent Director16.6yrsUS$390.55k0.019% $4.0m
Thomas Prescott
Director17.9yrsUS$355.05k0.17% $36.8m
Susan Siegel
Independent Director2.9yrsUS$359.22k0.0038% $802.0k
George Morrow
Independent Director14yrsUS$382.05k0.070% $15.0m
Charles Larkin
Independent Chairman14yrsUS$536.93k0.040% $8.4m
Warren Thaler
Independent Director15.7yrsUS$373.55k0.16% $33.6m
Andrea Saia
Independent Director6.6yrsUS$382.05k0.018% $3.8m
Kevin Dallas
Independent Director1.9yrsUS$437.72k0.0018% $382.9k

14.0yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ALGN's board of directors are seasoned and experienced ( 14 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ALGN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Align Technology, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Align Technology, Inc.
  • Ticker: ALGN
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Health Care Supplies
  • Sector: Healthcare
  • Market Cap: US$21.274b
  • Shares outstanding: 78.81m
  • Website: https://www.aligntech.com

Number of Employees


Location

  • Align Technology, Inc.
  • 2820 Orchard Parkway
  • San Jose
  • California
  • 95134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALGNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 2001
AFWDB (Deutsche Boerse AG)YesCommon StockDEEURJan 2001
0HCKLSE (London Stock Exchange)YesCommon StockGBUSDJan 2001
ALGN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 2001
ALGNWBAG (Wiener Boerse AG)YesCommon StockATEURJan 2001
A1LG34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

Align Technology, Inc., a medical device company, designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontics, and restorative and aesthetic dentistry worldwide. It operates in two segments, Clear Aligner; and Scanners and Services. The Clear Aligner segment consists of comprehensive products, including Invisalign Comprehensive treatment that addresses the orthodontic needs of teenage patients, such as compliance indicators and compensation for tooth eruption; Invisalign Assist treatment, which offers support to dental practitioners throughout the treatment process, including progress tracking; and Invisalign First Phase I and Invisalign First Comprehensive Phase II package for younger patients with early mixed dentition with a mixture of primary/baby and permanent teeth. This segment’s non-comprehensive products comprise Invisalign Express 10, Invisalign Express 5, Express Package, Lite Package, Invisalign Go, and SmileDirectClub; and non-case products include retention products, Invisalign training fees, and sales of ancillary products, such as cleaning material, and adjusting tools used by dental professionals during the course of treatment. The Scanners and Services segment offers restorative software for general practitioner dentists, prosthodontists, periodontists, and oral surgeons; software for orthodontists for digital records storage, orthodontic diagnosis, and for the fabrication of printed models and retainers; computer-aided design/computer-aided manufacturing services and ancillary products, such as disposable sleeves for the wand; and iTero applications and tools. The company was founded in 1997 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 23:45
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.