MeritValue

ALIGN TECHNOLOGY INC

ALGNdata completeness 88%18 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

ALIGN TECHNOLOGY INC earns about 18% on invested capital, far above its ~9% cost of capital, and has bought back 9% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $60.15 and $192.07 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$3.95B1$3.73B2$3.86B3$4B3$4.03B3
Net income$772M4$361.6M5$445.1M6$421.4M6$410.4M6
Operating cash flow$1.17B7$568.7M8$785.8M9$738.2M9$593.2M9
Capital expenditure$401.1M10$291.9M11$177.7M12$115.6M12$102.4M12
Free cash flow (derived)$771.4M7$276.8M8$608.1M9$622.7M9$490.8M9
Total debt—————
Cash & equivalents$1.1B13$942.1M14$937.4M15$1.04B16$1.09B16
Diluted shares79.7M78.4M76.6M75.0M72.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$557.83
your share of equity
Profit it earned you last year
$56.53
Free cash flow it threw off
$67.61
Debt you’d be carrying
—

10 shares is a claim on $557.83 of net worth that earned you $56.53 and generated $67.61 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 31%FY22 14%FY23 17%FY24 15%FY25 14%

It earned about 18% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−9% shares · 5y

Share count is down 9% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $60.15 and $192.07 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$192.07
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth6.2%
  • fcfBase$608.1M
DCF · Growth Exit 5Y
$171.7
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth6.2%
  • fcfBase$608.1M
Earnings Power Value
$60.15
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$421.4M
  • growthAssumed0.0%
Graham Number
$84.21
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years6.2%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $171.7
The three cases
Bear0.0%$134.77
Base6.2%$171.7
Bull11.2%$207.88

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 6.2%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001097149-24-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001097149-25-000012 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001097149-26-000014 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001097149-24-000011 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001097149-25-000012 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001097149-26-000014 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001097149-24-000011 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001097149-25-000012 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001097149-26-000014 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001097149-24-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001097149-25-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001097149-26-000014 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001097149-23-000013 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001097149-24-000011 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001097149-25-000012 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001097149-26-000014 (CashAndCashEquivalentsAtCarryingValue)