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Align Technology, Inc. (ALGN)

Overvalued
HealthcareMedical Instruments & SuppliesUnited States

Fundamental

77

Price

$145.35

Market Cap

$10.35B

Part 1 · What the company is worth

Overview

Align Technology makes Invisalign, a series of clear, custom-molded plastic trays that gradually straighten teeth as an alternative to metal braces, sold to orthodontists and general dentists who fit and monitor patients through the treatment. It also sells iTero intraoral scanners, which capture a 3D digital model of a patient's mouth used both to plan Invisalign treatment and, more broadly, for other dental and orthodontic work, plus the CAD/CAM software that runs the whole design and manufacturing process.

How it makes money

Align earns Clear Aligner revenue per treatment case: a doctor orders a set of custom aligners, Align manufactures and ships them, and revenue is recognized as trays are delivered over the course of treatment. Systems and Services revenue comes from selling or leasing iTero scanners plus recurring CAD/CAM software and service fees. Because key aligner patents began expiring in 2017, pricing power now rests more on brand recognition, the doctor-training network and scanner ecosystem than on legal exclusivity.

Revenue by segment

Clear Aligner80.43%

Custom clear aligner trays for straightening teeth, sold per treatment case to orthodontists and general dentists worldwide.

Systems and Services19.57%

iTero intraoral scanners plus the CAD/CAM software and services used to plan and manufacture both Invisalign and other dental work.

Competitive moat

Brand · Narrow

Invisalign is the name patients ask for by default, built over two decades of marketing and a large trained network of certified doctors. But the aligner patents that once blocked competitors began expiring in 2017, and cheaper rivals plus direct-to-consumer and in-office 3D-printed alternatives have since chipped away at both volume growth and pricing.

What drives demand

Moderately cyclical

Straightening teeth is largely elective and often paid out of pocket or through limited dental insurance, so case volumes soften when consumers pull back discretionary spending. Growth also depends on expanding into new international markets and younger teen patients, both of which move independently of any single economic cycle but are still sensitive to household budgets.

Key risks

  • Patent expiry and low-cost competition — Key clear-aligner patents have expired in the US and abroad, letting lower-priced rivals and direct-to-consumer aligner services compete for the same patients and pressure the prices Align can charge.
  • Discretionary consumer spending — Orthodontic treatment is often optional and expensive, so case starts slow when consumers are cautious about spending, even if their teeth alignment need has not changed.
  • International and China exposure — A meaningful part of growth depends on international markets, including China, where local competitors, economic slowdown or regulatory change can reduce case volume independent of trends in the US.
  • Intellectual property litigation — Align is involved in ongoing patent and other IP disputes with competitors and doctors; adverse rulings could restrict product features or require payments that reduce profitability.

Customer concentration

Align sells to hundreds of thousands of orthodontic and dental practices worldwide rather than a few large accounts, so no single customer represents a material share of revenue.

The case for

Buyers argue that Invisalign's brand recognition and trained doctor network still give it the largest share of a clear aligner market that keeps growing as more patients choose aligners over metal braces, with international expansion offering years of additional case growth.

The case against

Sellers fear that patent expiry has permanently opened the door to cheaper competitors, that elective treatment spending is exposed to consumer caution, and that growth increasingly depends on international markets where Align's brand advantage is weaker.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

Compare

Generated on August 23, 2026 with claude-opus-5 — shared with all users

P/E: 40.5Score: 64Market cap: $3.87B

Its Ormco unit sells the Spark clear aligner system to the same orthodontists Invisalign is sold to, competing case by case on aligner material, software and treatment planning.

P/E: —Score: 54Market cap: $1.90B

Sells SureSmile clear aligners and Primescan intraoral scanners to the same dental practices, overlapping with both of Align's businesses at once.

P/E: 10.8Score: 74Market cap: $15.24B

Its Dental Solutions arm sells Clarity aligners, brackets and bonding systems to orthodontists, competing for the same orthodontic case volume.

Straumann Holding AGSTMN

Its ClearCorrect aligner brand competes for the same orthodontic and general-dentist customers worldwide, pushed through Straumann's large European implant and digital-dentistry sales network.

Angelalign Technology Inc. (时代天使)6699

The largest clear aligner maker in China and now expanding into Europe, Latin America and Asia, taking aligner cases directly from Invisalign in the markets Align counts on for growth.

3Shape A/SNot tracked

Its TRIOS intraoral scanners are the main alternative to Align's iTero scanners in dental practices, competing for the chairside digital-scanning workflow.

Balance Sheet & Liquidity

Revenue

$4.14B

Trailing 12 months (through 6/30/2026)

Net Income

$414M

Trailing 12 months (through 6/30/2026)

Free Cash Flow

$491M

Total Equity

$4.05B

Total Liabilities

$2.18B

Current Ratio

1.40

Interest Coverage

-

Debt/EBITDA

0.15

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

General caseOvervalued

Fair Value

$118.35

Current Price

$145.35

Margin of Safety

-22.8%

Fair Value Range

$76.93 - $159.77

Spread across the valuation methods used, not a statistically calibrated confidence interval.

Estimation Methods

Analyst price target:$208.60
Discounted cash flow (DCF):$94.10
Earnings multiple (P/E):$72.43
Graham growth formula:$43.08
Earnings power value (EPV):$43.10
Justified P/B:$37.33
Dividend discount (Gordon):Not enough data to compute it
P/FFO, funds from operations:$145.90
Mid-cycle earnings:$206.75
Revenue multiple:$228.04
Analyst Consensus:Buy (16B / 8H / 1S)
Last Earnings Surprise:-0.87%

Valuation Metrics

P/E Ratio

25.32

ROE

10.1%

P/B Ratio

2.44

P/FCF

16.30

Gross Margin

68.0%

ROIC

9.6%

Profitability Radar

Value Creation (Economic Moat)

ROIC

9.6%

WACC

13.9%

ROIC − WACC

-4.3 pp

ROIC is below the cost of capital — the company is destroying value for every dollar invested.

Fundamental Analysis Criteria

Passed (21)

  • EPS shows upward trend
  • EPS CAGR 9.65%
  • ROIC 9.6%
  • Gross Margin 68.0%
  • P/FCF 16.30
  • P/B Ratio 2.44
  • Debt/Equity ratio
  • Operating Margin 13.2%
  • Positive Free Cash Flow
  • CapEx intensity
  • Current Ratio
  • Debt/EBITDA
  • Return on Tangible Assets
  • Low reliance on intangibles
  • ROE 10.1%
  • Revenue Growth 5Y 10.3%
  • Analyst Consensus 64% Buy
  • Earnings Surprise avg 6.3%
  • Earnings Quality (OCF/NI) 1.83
  • Share Dilution -3.1%
  • Piotroski F-Score 7/9

Failed (4)

  • Price CAGR 4.42%
  • Price below Graham Number
  • DCF valuation (Overvalued)
  • Net Margin Trend 10.0% vs 11.0%

Unavailable (3)

  • Dividend Payout NaN%
  • Interest Coverage
  • PEG Ratio (need PE > 0 and growth > 0)

Piotroski F-Score

7/9

Strong financial health

score
criteria

Earnings Quality

1.83

High quality: earnings backed by cash

Share Dilution

-3.1%

Buying back shares. Shareholder friendly

Institutional Holdings

Governance

Executive Team

NameTitleAge
Mr. Joseph M. HoganPresident, CEO & Director68
Mr. John F. MoriciCFO & Executive VP of Global Finance58
Mr. Zelko RelicExecutive VP & CTO60
Ms. Shirley StacyVice President of Corporate Communications & Investor Relations-
Richardson Jaime HolteExecutive Vice President of Global Human Resources-
Ms. Sreelakshmi KolliExecutive VP and Chief Product & Digital Officer50
Mr. Srini KazaExecutive Vice President of Research & Development-
Dr. Mitra DerakhshanExecutive VP, Chief Clinical Officer, Global Treatment Planning & Clinical Services-
Mr. David CarrExecutive VP and MD of EMEA-
Mr. Frank QuinnExecutive VP & MD of Americas Region-

Audit Risk

1

Board Risk

4

Compensation Risk

9

Shareholder Rights Risk

7

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Documents

  • Annual Report (10-K)

    A yearly overview of the business, its financial results, and the risks it faces.

    Filed on 2026-02-27

    View document
  • Quarterly Report (10-Q)

    A snapshot of financial performance for the most recent three-month period.

    Filed on 2026-08-05

    View document
  • Current Report (8-K)

    An announcement of a major event, such as a leadership change or big news.

    Filed on 2026-08-31

    View document

via SEC EDGAR

Income History

via SEC EDGAR

Latest News

Recent headlines for ALGN, sourced from Markets Gazette.

  • 4/7/2026POSITIVE
    Alignment Stock Surges After 2.48% Medicare Rate Hike

    Alignment Healthcare Inc. experienced a significant surge in its stock price following the Centers for Medicare & Medicaid Services (CMS) announcement of a 2.48% rate increase for 2027 Medicare Advantage and Part D programs. This favorable adjustment is expected to bolster the company's revenue streams and profitability, as these programs represent a substantial portion of Alignment Healthcare's business. Investors are reacting positively to the improved financial outlook, anticipating enhanced earnings and a stronger market position for the healthcare provider.

  • 3/19/2026POSITIVE
    Align Technology Shares Jump Following Report Of Large Elliott Position

    Align Technology shares surged following news that activist investor Elliott Investment Management has taken a significant stake in the company. Elliott's involvement typically signals a push for strategic changes, often aimed at unlocking shareholder value. The move comes as Align Technology, the maker of Invisalign, faces challenges in its post-pandemic growth trajectory. Investors are likely interpreting this as a potential catalyst for operational improvements and a re-evaluation of the company's strategic direction, which could lead to enhanced financial performance.

  • 3/19/2026NEUTRAL
    Elliott Builds Stake in Invisalign-Maker Align Technology

    Hedge fund Elliott Investment Management has acquired a substantial stake in Align Technology Inc., the company renowned for its Invisalign clear aligners. This move by a prominent activist investor suggests potential for strategic changes or operational improvements within Align Technology. While the specific intentions of Elliott are not yet disclosed, such stake-building often precedes engagement with management to unlock shareholder value. Investors will be watching closely for any strategic shifts or performance enhancements that Elliott may advocate for, which could impact the company's future trajectory and stock performance.

via Markets Gazette