Align Technology, Inc. (ALGN) Intrinsic Value & DCF Valuation
Medical - Devices · NASDAQ
Current Price
$180.08
Intrinsic Value
$182.29
+1.2% margin of safety
What Is Align Technology, Inc.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Align Technology, Inc. (ALGN) at $182.29 per share, compared with a market price of $180.08, a margin of safety of +1.2%. The base case assumes 4.3% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $145.2 to $225.16. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Align Technology, Inc. (ALGN) Undervalued?
At $180.08, ALGN trades about 1.2% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Proprietary Digital Workflow
Align's iTero scanner and proprietary software create a digital record of patient scans. This data fuels their Invisalign treatment planning and manufacturing, creating a significant technological advantage.
↑Brand Recognition and Dentist Loyalty
Invisalign is a household name in clear aligners, fostering strong brand loyalty among both consumers and dental professionals. This brand equity translates into consistent demand and repeat business.
↑Scale and Manufacturing Efficiency
Align's extensive global manufacturing infrastructure and high volume of aligner production lead to cost efficiencies. This scale allows for competitive pricing and rapid fulfillment of orders.
INVESTMENT RISKS
↓Intensifying Competition
The clear aligner market is becoming increasingly crowded with both established dental companies and new entrants. This could lead to price wars and market share erosion.
↓Dependence on Dental Professionals
Align's success is heavily reliant on the adoption and recommendation of its products by dentists. Any shift in dentist preference or training could negatively impact sales.
↓Economic Sensitivity
Orthodontic treatments are discretionary healthcare expenses. Economic downturns or reduced consumer spending could lead to a decrease in demand for Invisalign.
Base case
ALGN base case valuation
Intrinsic Value
$182.29
Margin of safety
+1.2%
Expected annual return
+0.2%
Base case assumptions: 4.3% annual growth, 10.0% discount rate, 17x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ALGN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Align Technology, Inc. respond.
Open DCF Calculator for ALGNCompany Overview
Align Technology, Inc. is a medical technology enterprise that develops, produces, and markets its leading products: Invisalign transparent dental aligners and iTero digital intraoral scanners, along with related services. These offerings serve a wide range of dental professionals, including orthodontists, general dentists, and those specializing in restorative and cosmetic dentistry. The company's operations are divided into two main business units: "Clear Aligner" and "Scanners and Services." The Clear Aligner segment offers a variety of solutions. Its comprehensive products include the full Invisalign treatment for teenage patients, designed to address complex orthodontic needs such as mandibular advancement, patient compliance tracking, and managing tooth eruption. It also features specialized Invisalign First Phase I and Phase 2 packages for younger children, typically aged seven to ten, who have mixed dentition (a combination of primary and permanent teeth). Beyond these, the segment provides non-comprehensive aligner options like Invisalign moderate, lite, express, and Invisalign Go. Additional non-case products include retention devices, fees for Invisalign training, and sales of ancillary items such as cleaning materials and adjustment tools used by dental practitioners during treatment. The Scanners and Services segment centers around the iTero scanner, a unified hardware platform offering various software applications for both restorative and orthodontic procedures. It supplies specialized restorative software to general dentists, prosthodontists, periodontists, and oral surgeons, as well as distinct software for orthodontists to manage digital patient records, perform diagnoses, and facilitate the fabrication of printed models and retainers. This segment also provides computer-aided design and manufacturing (CAD/CAM) services, along with supplementary products like disposable covers for the scanner wand and iTero models and dies. Furthermore, it includes third-party scanners and digital scan solutions, the Invisalign Outcome Simulator (a chair-side and cloud-based application for the iTero scanner), the Invisalign Progress Assessment tool, and TimeLapse technology, which enables clinicians to compare a patient's historical 3D scans against current data. Align Technology distributes its products worldwide, with a strong presence in the United States, Switzerland, and China. Founded in 1997, the company is headquartered in Tempe, Arizona.
Financial Metrics — ALGN Stock Valuation Data
Revenue/Share (TTM)
$57.93
FCF/Share (TTM)
$10.58
ROIC (TTM)
8.9%
ROE (TTM)
10.1%
P/FCF
17.1x
EV/EBITDA
15.1x
FCF Yield
5.86%
Debt/Equity
0.02x
Based on trailing twelve-month data, ALGN shows a free cash flow per share of $10.58 and a ROIC of 8.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 17.1x and FCF yield of 5.86% are important context metrics when evaluating ALGN's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ALGN?
Align Technology, Inc. currently generates $10.58 in free cash flow per share. At the current price of $180.08, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ALGN undervalued?
ALGN trades at a P/FCF ratio of 17.1x with a free cash flow yield of 5.86%. This P/FCF is in a moderate range. However, whether ALGN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ALGN stock using DCF?
To perform a DCF valuation on Align Technology, Inc.: (1) Start with the trailing free cash flow per share ($10.58) as the base, (2) project future FCF growth over 5-10 years based on Medical - Devices industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ALGN's risk profile — with a debt-to-equity of 0.02x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ALGN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Align Technology, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Medical - Devices trends, then discounting those amounts to today's dollars. ALGN's ROIC of 8.9% shows moderate capital returns.
How does WACC affect ALGN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ALGN, with a debt-to-equity ratio of 0.02x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 15.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ALGN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value ALGN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.