While growth is established for NASDAQ:ALGN, the stock's valuation remains reasonable.

Our stock screener has singled out ALIGN TECHNOLOGY INC (NASDAQ:ALGN) as an attractive growth opportunity. NASDAQ:ALGN is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Exploring NASDAQ:ALGN's Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:ALGN, the assigned 7 reflects its growth potential:

• ALGN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.77%, which is quite impressive.
• 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.
• The Earnings Per Share is expected to grow by 15.50% on average over the next years. This is quite good.
• The Revenue is expected to grow by 10.49% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Valuation Insights: 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 6 for valuation:

• 81.15% of the companies in the same industry are more expensive than ALGN, based on the Price/Earnings ratio.
• 81.68% of the companies in the same industry are more expensive than ALGN, based on the Price/Forward Earnings ratio.
• Based on the Enterprise Value to EBITDA ratio, ALGN is valued a bit cheaper than the industry average as 79.58% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, ALGN is valued cheaply inside the industry as 85.34% of the companies are valued more expensively.
• The excellent profitability rating of ALGN may justify a higher PE ratio.
• ALGN's earnings are expected to grow with 14.81% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Health for NASDAQ:ALGN?

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:ALGN scores a 8 out of 10:

• An Altman-Z score of 5.92 indicates that ALGN is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 5.92, ALGN is doing good in the industry, outperforming 79.58% of the companies in the same industry.
• 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.

Profitability Examination for NASDAQ:ALGN

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:ALGN, the assigned 8 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 7.51%, ALGN belongs to the top of the industry, outperforming 87.43% of the companies in the same industry.
• ALGN's Return On Equity of 12.29% is amongst the best of the industry. ALGN outperforms 87.96% of its industry peers.
• ALGN has a better Return On Invested Capital (10.63%) than 91.62% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for ALGN is above the industry average of 8.62%.
• Looking at the Profit Margin, with a value of 11.80%, ALGN belongs to the top of the industry, outperforming 88.48% of the companies in the same industry.
• Looking at the Operating Margin, with a value of 17.29%, ALGN belongs to the top of the industry, outperforming 90.58% 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 81.68% of the companies in the same industry.

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

For an up to date full fundamental analysis you can check the fundamental report of ALGN

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.