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

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.

Unpacking NASDAQ:ALGN's Growth Rating

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:

• 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.
• 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

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 cheaper than 80.65% of the companies in the same industry.
• 81.18% of the companies in the same industry are more expensive than ALGN, based on the Price/Forward Earnings ratio.
• 79.57% of the companies in the same industry are more expensive than ALGN, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, ALGN is valued cheaper than 80.11% 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 13.32% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:ALGN

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:ALGN, the assigned 8 for health provides valuable insights:

• An Altman-Z score of 6.08 indicates that ALGN is not in any danger for bankruptcy at the moment.
• ALGN's Altman-Z score of 6.08 is amongst the best of the industry. ALGN outperforms 82.80% of its industry peers.
• 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.

Looking at the Profitability

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:

• With an excellent Return On Assets value of 7.26%, ALGN belongs to the best of the industry, outperforming 88.17% of the companies in the same industry.
• ALGN has a Return On Equity of 11.90%. This is amongst the best in the industry. ALGN outperforms 87.10% of its industry peers.
• The Return On Invested Capital of ALGN (10.77%) is better than 91.40% 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 8.20%.
• ALGN's Profit Margin of 11.34% is amongst the best of the industry. ALGN outperforms 85.48% of its industry peers.
• The Operating Margin of ALGN (17.33%) is better than 88.71% of its industry peers.
• With an excellent Gross Margin value of 69.82%, ALGN belongs to the best of the industry, outperforming 81.72% 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.

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.