Align Technology, Inc. (ALGN) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Align Technology, Inc.

Updated on October 31, 2026 · accounts published on October 28, 2026

A profitable, cash-rich business whose growth and margins have stalled

Align Technology trades at a P/E of 22.0 over the last 12 months, 57 % below its ten-year median of 51.4 and 28 % below its sector median.

• Is Align Technology expensive or cheap? Its P/E of 22.0 is 57 % below its ten-year median of 51.4; it has traded lower only 4 % of the time in the last decade.
• How is the business doing? Operating margin is 15 % over the last 12 months, well below its 20.5 % average of 2014-2025, with revenue up just 0.9 %.
• How strong is the balance sheet? Debt-to-equity is just 0.03, and net cash of $13.52 per share equals 9 % of the share price (fiscal 2025).
• What to expect from the next earnings? 23 of 33 analysts rate it a buy; next results on February 3, 2027, with EPS of $3.09 expected for the quarter.
• Does it invest enough in R&D and turn profit into cash? R&D was 9.2 % of revenue in fiscal 2025, below the 15 % healthy mark, while free cash flow was 120 % of net income.

Is Align Technology expensive or cheap?

Over the last 12 months Align Technology has traded at a P/E of 22.0. That is 57 % below its ten-year median of 51.4, and the stock has been cheaper on this measure only 4 % of the time in the past decade, so it sits close to its decade low of 18.5. It also trades 28 % below the sector median P/E of 30.7 across 249 companies. A free cash flow yield of 7.3 % shows the discount holds up in cash terms too. Part of the discount reflects a business that has stopped growing. The shares are up 12 % over 12 months but still 22 % below their 52-week high of $197.51.

How is the business doing?

Align Technology is barely growing. Revenue rose 0.9 % and EPS 0.5 % over the last 12 months, after EPS shrank 24.2 % a year over fiscal 2020-2025. The operating margin of 15 % over the last 12 months matches fiscal 2025 and sits well below the 20.5 % average of 2014-2025. Returns still beat peers. ROIC of 10.4 % is 4.8 points above the sector median of 5.6 % across 345 companies, and it topped 10 % in 7 of the last 10 fiscal years, with the low at 9.6 % in 2022. The business still earns well, just less than it used to.

How strong is the balance sheet?

The balance sheet is a cushion. Debt-to-equity is 0.03 over the last 12 months. At the end of fiscal 2025, cash of $15.09 per share far exceeded debt of $1.58, leaving net cash of $13.52, equal to 9 % of the current price. Net debt to EBITDA was −1.3× in fiscal 2025, against a healthy ceiling of 2.5× for the sector. The Altman Z of 4.8 sits in the safe zone, the current ratio is 1.42 and the Piotroski score is 6 of 9, a solid but unspectacular reading. Financial risk is low. The open questions are about operations.

What to expect from the next earnings?

Align Technology has beaten EPS estimates in 7 of the last 8 quarters. On October 28, 2026 it reported EPS of $2.80 against $2.77 expected, a narrow 1.1 % beat. For the quarter it reports on February 3, 2027, analysts expect EPS of $3.09. The 2026 EPS consensus slipped 0.7 % in the last 30 days, from $11.29 to $11.21 across 10 analysts, while the revenue forecast barely moved. Of 33 analysts, 23 recommend buying, 8 holding and 2 selling. With growth near zero, the February report matters more for what it shows about margins than for whether it beats.

Does it invest enough in R&D and turn profit into cash?

In healthcare, the R&D pipeline is the invisible asset. Expiring patents mean revenue that disappears, so the sector is judged on innovation and cash flow. Align Technology spent 9.2 % of revenue on R&D in fiscal 2025, short of the 15 % that counts as healthy. Its fiscal 2025 gross margin of 68.3 % sits just under the 70 % bar for branded pharma, and ROIC of 10.4 % over the last 12 months misses the 12 % threshold. Cash is the strong point: free cash flow equalled 120 % of net income in fiscal 2025, above the 90 % benchmark.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.