Today’s Align price per share (as of November 22) is $255.92 and it still keeps slightly increasing over time. In the past five years, the share price of the company has increased dramatically, by around 733.88% from $25.78 per share in 2013 up to today’s price of $255.92.
The screen shot above represents the results of the end of the third quarter that were announced on Thursday, October 26. The quarter over quarter and year over year % changes show by how much have the net revenue, net profit, diluted EPS and other financial factors increased comparing to the previous quarter and previous year. The percentage increase is noticeably high especially for the past year and it can be considered as a very reasonable factor to buy this stock. On the day the results were announced, the stock closing price was $202.59 and on the next day the price jumped up to $235.94. During another next 5 days the stock price has increased by another $6. Analysts believe that the stock will go up to around $400 in the next 3-5 years and therefore here is another reason to buy this stock today and make more money later. In order to see if the stock is over or undervalued, DCF calculator was used for this analysis. Before starting the analysis, I found estimation for future earnings rates that were provided by NASDAQ. It estimated that earnings will continue to grow at an average annual rate of 26.58% for the next 5 years and these are the numbers that were used for the DCF analysis calculation. After that period of time, I believe that earnings will continue to grow at 15% per year. The S&P500 return of 16.2% was included in the calculator (the percentage was taken on October 26) and stock value per share resulted to be $448.25, which is almost as twice as big as the current price, and which shows us that the stock is undervalued and should be bought. DCF analysis and NASDAQ future estimate screenshots are provided below:
NASDAQ future estimate DCF Analysis using NASDAQ expected earnings The revenue of the company has noticeably increased as well. Between the end of the fiscal year in 2014 and 2015 there was an increase of 11%, by 2016 it has increased by 28% and reached the revenues of $1,079,874,000. Its net income slightly lowered down between 2014 and 2015 by almost 2%, but improved itself next year and went up by 32%. Align’s beta is 1.54, which can give a clue that the company is more volatile than the market, offers a good rate of return but at the same time includes some risk. The company does
not pay dividends, which is also a good sign of being highly valuable and profitable company. Align’s PE Ratio is pretty high – 69.44 (TTM), since this company has not being in the market for too long and will most likely continue to grow, its PE ratio will either stay similar or will continue going up. Align’s EPS (TTM) is 2.97, which probably will not say much to us, but the fact that it is positive and the ratio is greater than one, it is possible to say that it is a highly valued company.
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