Let's talk about the popular Align Technology, Inc. (NASDAQ:ALGN). The company's shares received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Align Technology's outlook and valuation to see if the opportunity still exists.
See our latest analysis for Align Technology
Is Align Technology Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It's trading around 1.7% below my intrinsic value, which means if you buy Align Technology today, you'd be paying a reasonable price for it. And if you believe that the stock is really worth $224.31, then there isn't much room for the share price grow beyond what it's currently trading. So, is there another chance to buy low in the future? Given that Align Technology's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Align Technology?
NasdaqGS:ALGN Earnings and Revenue Growth December 3rd 2023
Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With profit expected to grow by 99% over the next couple of years, the future seems bright for Align Technology. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in ALGN's positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you've been keeping an eye on ALGN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.