Align Technology, Inc. (ALGN) Stock Valuation — DCF Analysis
Medical - Devices · NASDAQ
Current Price
$174.84
Intrinsic Value
$230.47
+24.1% margin of safety
COMPETITIVE MOAT
↑Invisalign Brand Dominance
Align's Invisalign brand is a household name, creating strong consumer pull and dentist preference. This established brand equity is difficult for competitors to replicate.
↑Proprietary Digital Workflow
The company's integrated digital scanning, treatment planning, and manufacturing system creates a sticky ecosystem. This technological advantage enhances efficiency and patient outcomes.
↑Global Dentist Network
Align has cultivated a vast network of trained dental professionals worldwide. This extensive reach and established relationships are a significant barrier to entry for new players.
INVESTMENT RISKS
↓North America Demand Pressure
The CFO noted ongoing challenges in North American demand. This could impact revenue growth if not offset by international expansion.
↓Competitive Landscape Intensifies
While Invisalign is dominant, other clear aligner and traditional orthodontic solutions exist. Increased competition could erode market share.
↓Technological Disruption
The rapid advancement of AI and digital dentistry presents opportunities but also risks. Competitors could develop superior or more cost-effective digital platforms.
Base case
ALGN base case valuation
A base case discounted cash flow model for ALGN estimates an intrinsic value of about $230.47 per share, against a current price of $174.84. The model assumes 11.1% annual free cash flow growth, a 10.0% discount rate, and a 18x exit multiple.
Intrinsic Value
$230.47
Margin of safety
+24.1%
Expected annual return
+5.7%
Base case assumptions: 11.1% annual growth, 10.0% discount rate, 18x exit multiple, 5 year projection. Data as of 2026-06-12.
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)
$57.34
FCF/Share (TTM)
$9.61
ROIC (TTM)
9.7%
ROE (TTM)
10.7%
P/FCF
18.3x
EV/EBITDA
14.5x
FCF Yield
5.48%
Debt/Equity
0.02x
Based on trailing twelve-month data, ALGN shows a free cash flow per share of $9.61 and a ROIC of 9.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 18.3x and FCF yield of 5.48% 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 $9.61 in free cash flow per share. At the current price of $174.84, 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 18.3x with a free cash flow yield of 5.48%. 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 ($9.61) 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 9.7% 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 14.5x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.