Is Align Stock Truly Worth its High Valuation Today?

ALGN has dropped more than 60% in price this year

Jun 10, 2022 at 12:34 PM
facebook twitter linkedin

Align Technology, Inc. (NASDAQ:ALGN) is a dental care company that designs, manufactures, and sells the Invisalign clear aligners used in orthodontics, the iTero intraoral scanners, and the exocad CAD/CAM software. On June 6, Align Technology announced the award of 11 research grants to universities under its 12th Annual Research Award Program. The dental care company awarded $275,000 in research grants to universities worldwide for advancing orthodontics and dental research as part of its ongoing awards program.

Align stock is sitting dangerously close to its roughly five-year low of $250.64, touched on May 12. The 30-day rejected a recent attempt to separate itself from this low, and now ALGN is trading at a 61.1% year-to-date deficit. 

algn june 10

The equity could be ripe for analyst downgrades, as all but one of the eight in coverage call it a "buy" or better. Plus, the 12-month consensus price target of $439.90 is a whopping 71.8% premium to current levels.

The dental care company still provides a high valuation at a forward price-earnings ratio of 27.03 and a price-sales ratio of 5.31 despite Align stock’s bearish form this past year. Align Technology is also anticipated to see a 10.6% decrease in earnings for fiscal 2022.

Nonetheless, ALGN is expected to report a 9.7% increase in revenues for fiscal 2022 and a 18.9% increase for fiscal 2023. The dental care name is also expected to bounce back on the bottom line in fiscal 2023, with a 25.8% estimated increase in earnings, making Align stock an intriguing long-term option as the business recovers from its earnings decline. In addition, Align Technology currently has $1.01 billion in cash and $130.23 million in total debt on their balance sheet, which should help them maintain their top line growth. Overall, Align stock is a viable option for growth investors despite its high valuation currently.



Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners