In the world of growth stocks, NASDAQ:ALGN shines as a value proposition.

Last update: Jun 4, 2024

Take a closer look at ALIGN TECHNOLOGY INC (NASDAQ:ALGN), an affordable growth stock uncovered by our stock screener. NASDAQ:ALGN boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Understanding NASDAQ:ALGN's Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:ALGN scores a 7 out of 10:

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

Valuation Analysis for NASDAQ:ALGN

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:ALGN has earned a 5 for valuation:

Based on the Price/Earnings ratio, ALGN is valued a bit cheaper than 78.65% of the companies in the same industry.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ALGN indicates a somewhat cheap valuation: ALGN is cheaper than 79.17% of the companies listed in the same industry.
Based on the Enterprise Value to EBITDA ratio, ALGN is valued a bit cheaper than the industry average as 77.08% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ALGN is valued cheaper than 82.29% of the companies in the same industry.
ALGN has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ALGN's earnings are expected to grow with 15.35% in the coming years.

How We Gauge Health for NASDAQ:ALGN

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:ALGN has earned a 8 out of 10:

An Altman-Z score of 6.46 indicates that ALGN is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.46, ALGN belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
There is no outstanding debt for ALGN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
ALGN does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Assessing Profitability for NASDAQ:ALGN

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:ALGN has achieved a 8:

ALGN has a Return On Assets of 7.51%. This is amongst the best in the industry. ALGN outperforms 88.02% of its industry peers.
ALGN's Return On Equity of 12.29% is amongst the best of the industry. ALGN outperforms 88.02% of its industry peers.
The Return On Invested Capital of ALGN (10.63%) is better than 92.19% 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 8.47%.
The Profit Margin of ALGN (11.80%) is better than 88.54% of its industry peers.
With an excellent Operating Margin value of 17.29%, ALGN belongs to the best of the industry, outperforming 91.15% of the companies in the same industry.
With an excellent Gross Margin value of 70.06%, ALGN belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.

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.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.