Investors should take note of NASDAQ:ALGN, a growth stock that remains attractively priced.

ALIGN TECHNOLOGY INC (NASDAQ:ALGN) was identified as an affordable growth stock by our stock screener. NASDAQ:ALGN is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Growth Analysis for NASDAQ:ALGN

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:

• 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.
• The Earnings Per Share has been growing by 11.86% on average over the past years. This is quite good.
• Measured over the past years, ALGN shows a quite strong growth in Revenue. The Revenue has been growing by 14.45% on average per year.
• ALGN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.50% yearly.
• 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.

Evaluating Valuation: NASDAQ:ALGN

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:ALGN, the assigned 5 reflects its valuation:

• 82.20% of the companies in the same industry are more expensive than ALGN, based on the Price/Earnings ratio.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of ALGN indicates a rather cheap valuation: ALGN is cheaper than 82.20% of the companies listed in the same industry.
• ALGN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALGN is cheaper than 78.53% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, ALGN is valued cheaply inside the industry as 80.10% of the companies are valued more expensively.
• ALGN has an outstanding profitability rating, which may justify a higher PE ratio.
• ALGN's earnings are expected to grow with 13.43% in the coming years. This may justify a more expensive valuation.

How We Gauge Health for NASDAQ:ALGN

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ALGN, the assigned 8 reflects its health status:

• An Altman-Z score of 6.15 indicates that ALGN is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 6.15, ALGN belongs to the top of the industry, outperforming 82.72% 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.
• 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.

What does the Profitability looks like for NASDAQ:ALGN

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 has a Return On Assets of 7.26%. This is amongst the best in the industry. ALGN outperforms 87.43% of its industry peers.
• ALGN has a Return On Equity of 11.90%. This is amongst the best in the industry. ALGN outperforms 87.43% of its industry peers.
• With an excellent Return On Invested Capital value of 10.77%, ALGN belongs to the best of the industry, outperforming 92.15% of the companies in the same industry.
• ALGN had an Average Return On Invested Capital over the past 3 years of 12.31%. This is above the industry average of 8.26%.
• ALGN has a better Profit Margin (11.34%) than 86.39% of its industry peers.
• ALGN has a Operating Margin of 17.33%. This is amongst the best in the industry. ALGN outperforms 89.53% of its industry peers.
• ALGN has a better Gross Margin (69.82%) than 81.68% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill 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.