Don't overlook NASDAQ:ALGN—a stock with solid growth prospects and a reasonable valuation.

Consider ALIGN TECHNOLOGY INC (NASDAQ:ALGN) as an affordable growth stock, identified by our stock screening tool. NASDAQ:ALGN is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Growth Assessment of NASDAQ:ALGN

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:ALGN was assigned a score of 7 for growth:

• The Earnings Per Share has grown by an impressive 29.09% over the past year.
• The Earnings Per Share has been growing by 11.86% on average over the past years. This is quite good.
• The Revenue has been growing by 14.45% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 15.50% on average over the next years. This is quite good.
• Based on estimates for the next years, ALGN will show a quite strong growth in Revenue. The Revenue will grow by 10.49% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

What does the Valuation looks like for NASDAQ:ALGN

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:ALGN has received a 5 out of 10:

• ALGN's Price/Earnings ratio is a bit cheaper when compared to the industry. ALGN is cheaper than 76.17% of the companies in the same industry.
• Based on the Price/Forward Earnings ratio, ALGN is valued a bit cheaper than 79.79% of the companies in the same industry.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALGN indicates a somewhat cheap valuation: ALGN is cheaper than 77.72% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, ALGN is valued cheaper than 81.35% of the companies in the same industry.
• The excellent profitability rating of ALGN may justify a higher PE ratio.
• ALGN's earnings are expected to grow with 13.48% in the coming years. This may justify a more expensive valuation.

Assessing Health for NASDAQ:ALGN

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ALGN has achieved a 8 out of 10:

• ALGN has an Altman-Z score of 6.78. This indicates that ALGN is financially healthy and has little risk of bankruptcy at the moment.
• ALGN's Altman-Z score of 6.78 is amongst the best of the industry. ALGN outperforms 83.94% of its industry peers.
• ALGN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• The current and quick ratio evaluation for ALGN is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Exploring NASDAQ:ALGN's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:ALGN was assigned a score of 8 for profitability:

• ALGN's Return On Assets of 7.51% is amongst the best of the industry. ALGN outperforms 88.08% of its industry peers.
• ALGN has a better Return On Equity (12.29%) than 87.05% of its industry peers.
• ALGN has a better Return On Invested Capital (10.63%) than 92.23% of its industry peers.
• ALGN had an Average Return On Invested Capital over the past 3 years of 12.31%. This is above the industry average of 8.50%.
• Looking at the Profit Margin, with a value of 11.80%, ALGN belongs to the top of the industry, outperforming 87.56% of the companies in the same industry.
• With an excellent Operating Margin value of 17.29%, ALGN belongs to the best of the industry, outperforming 90.16% of the companies in the same industry.
• ALGN has a better Gross Margin (70.06%) than 80.83% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of ALGN for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.