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Align Technology, Inc. (NASDAQ:ALGN) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of ALGN, it is a financially-healthy company with a strong track record and an optimistic future outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Align Technology here.
Flawless balance sheet with outstanding track record
Investors in search of impressive top-line expansion should look no further than ALGN, with its expected 52% revenue growth in the upcoming year. This underlies the notable 40% return on equity over the next few years leading up to 2022. In the previous year, ALGN has ramped up its bottom line by 73%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 32%. which is an notable feat for the company.
ALGN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. ALGN currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is rather impressive for a US$22b market cap company. ALGN has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For Align Technology, I’ve put together three pertinent aspects you should look at:
- Valuation: What is ALGN 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 ALGN is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does ALGN return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ALGN as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ALGN? Explore our interactive list of stocks with large 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 firstname.lastname@example.org. 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.