ALGN – Market expectations are for Uniform ROA to improve, but management may have concerns about their product, growth, and marketing initiatives

March 28, 2022

  • Align Technology, Inc. (ALGN) currently trades above corporate, but below historical averages relative to Uniform earnings, with a 29.9x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to slightly improve to 43%, accompanied by 9% Uniform asset growth.

  • Meanwhile, analysts expect Uniform ROA to fade to 41% by 2023, accompanied by 19% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $525, representing approximately 31% equity upside for the firm.

  • Moreover, the firm’s most recent earnings call suggests management may have concerns about product features, growth opportunities, and marketing initiatives.

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