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Align Technology, Inc. (NASDAQ:ALGN): Will The Growth Last?

Simply Wall St

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Since Align Technology, Inc. (NASDAQ:ALGN) released its earnings in March 2019, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 27% in the upcoming year relative to the past 5-year average growth rate of 22%. With trailing-twelve-month net income at current levels of US$400m, we should see this rise to US$507m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Align Technology in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Align Technology

How will Align Technology perform in the near future?

The longer term expectations from the 17 analysts of ALGN is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of ALGN's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqGS:ALGN Past and Future Earnings, July 17th 2019

By 2022, ALGN's earnings should reach US$808m, from current levels of US$400m, resulting in an annual growth rate of 22%. This leads to an EPS of $9.43 in the final year of projections relative to the current EPS of $5. Margins are currently sitting at 20%, which is expected to expand to 22% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Align Technology, I've put together three fundamental factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Align Technology worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Align Technology is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Align Technology? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.