Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.8 |
| P/S | 8.5 |
| EV/EBITDA | 5.7 |
| Fwd P/E | 8.8 |
| PEG | 9.2 |
| Analyst target | 6.0 |
- ▸Forward P/E: 12.5x
- ▸PEG: 0.63
- ▸Attractively valued
ALGN · Why this verdict
Why Align Technology (ALGN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Align Technology is a high-margin clear aligner maker at 12.2x forward earnings with strong earnings growth and cash conversion, but 80% of revenue is one product segment, upside to the analyst target is only 8.2%, and the stock is in a downtrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is 135% of net income, the gross margin component is 10.0/10, and the Piotroski F-Score is 8 out of 9. Quality breakdown | Free cash flow stays above 100% of net income and gross margin holds near current levels. | ↑Improving |
| CounterThe Rule of 40 reading is only 18 (fail), showing the combination of growth and profitability is weak. | ||
Forward P/E is 12.2x with a PEG of 0.63 and an earnings growth component of 10.0/10, scoring 7.5/10 on value. Valuation breakdown | Forward earnings are delivered so the forward P/E stays below 14x. | ↑Improving |
| CounterRevenue growth scores only 3.0/10 and the growth rank versus peers is 1.1, so earnings growth may come from cost cuts that cannot continue. | ||
The Clear Aligner segment makes up 80.0% of revenue, a high-severity product concentration risk. Bear case | Clear Aligner share of revenue falls below 78% as other segments grow. | ↓Deteriorating |
| CounterA competitive or pricing shock in clear aligners would hit most of revenue at once. | ||
The $149.89 price is 8.2% below the $162.25 analyst target against 7.9% downside to the stop, a reward-to-risk of 1.04. Estimated upside | Analyst targets rise above $170 or the price pulls back toward the $140.51 stop zone. | ↑Improving |
| CounterAnalyst sentiment is favorable (24% upside by raw targets), so the target can rise if growth reaccelerates. | ||
The price is below a 200-day average falling 1.3% over 30 days, and the put/call ratio is 3.80, showing bearish positioning. Risk breakdown | The 200-day average slope turns flat and put/call falls below 2.0. | ↓Deteriorating |
| CounterMACD is improving, on-balance volume is rising, and momentum at 6.2/10 suggests a recovery is underway. | ||
Free cash flow is 135% of net income, the gross margin component is 10.0/10, and the Piotroski F-Score is 8 out of 9.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow stays above 100% of net income and gross margin holds near current levels.
CounterThe Rule of 40 reading is only 18 (fail), showing the combination of growth and profitability is weak.
Forward P/E is 12.2x with a PEG of 0.63 and an earnings growth component of 10.0/10, scoring 7.5/10 on value.
↑ImprovingValuation breakdown
- Expectation
- Forward earnings are delivered so the forward P/E stays below 14x.
CounterRevenue growth scores only 3.0/10 and the growth rank versus peers is 1.1, so earnings growth may come from cost cuts that cannot continue.
The Clear Aligner segment makes up 80.0% of revenue, a high-severity product concentration risk.
↓DeterioratingBear case
- Expectation
- Clear Aligner share of revenue falls below 78% as other segments grow.
CounterA competitive or pricing shock in clear aligners would hit most of revenue at once.
The $149.89 price is 8.2% below the $162.25 analyst target against 7.9% downside to the stop, a reward-to-risk of 1.04.
↑ImprovingEstimated upside
- Expectation
- Analyst targets rise above $170 or the price pulls back toward the $140.51 stop zone.
CounterAnalyst sentiment is favorable (24% upside by raw targets), so the target can rise if growth reaccelerates.
The price is below a 200-day average falling 1.3% over 30 days, and the put/call ratio is 3.80, showing bearish positioning.
↓DeterioratingRisk breakdown
- Expectation
- The 200-day average slope turns flat and put/call falls below 2.0.
CounterMACD is improving, on-balance volume is rising, and momentum at 6.2/10 suggests a recovery is underway.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.0 |
| ROA | 5.3 |
| Gross margin | 10.0 |
| Op margin | 8.1 |
| Net margin | 5.9 |
| Current ratio | 5.3 |
| FCF quality | 9.5 |
| Moat | 6.8 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 135% FCF/NI
- ▸Rule of 40: 18 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.0 |
| EPS growth | 10.0 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.3%/30d — confirmed downtrend
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 8.0 |
| erm sentiment | 3.2 |
- ▸Analyst upside: 23%
Insider
5.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.2 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.4 |
| quality rank | 7.7 |
| growth rank | 1.1 |
- ▸Conservative debt levels
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 2.7 |
| 52w position | 5.1 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 6.4 |
| volatility | 4.4 |
| put call | 0.0 |
| implied vol | 4.0 |
| max pain risk | 3.0 |
| beta | 4.2 |
| debt equity | 9.9 |
- ▸Elevated put/call: 2.61
- ▸Above max pain $90
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 2.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:92d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.8<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
0.79
Upside
+7.0%
Downside
8.9%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 61
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.74>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.1>=5.5. Top dim: Value at 7.5; weakest: Technical at 3.8. No conviction either direction.
The strongest dimensions are Value at 7.5, Quality at 6.7, and Growth at 6.5; the weakest are Technical at 3.8, Risk (lower is worse) at 4.8, and Insider at 5.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.79 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Strong Earnings Growth
Trip ifForward P/E rises above 17x from current 12.2x.
- P2High Margin Cash Generation
Trip ifFree cash flow to net income falls below 90% from current 135%.
- P3Clear Aligner Concentration
Trip ifClear Aligner share of revenue exceeds 85% from current 80.0%.
- P4Thin Upside To Target
Trip ifShare price falls below the $140.51 stop level, a drop of more than 6.3%.
- P5Downtrend And Bearish Options
Trip ifPut/call ratio stays above 4.5 for 4 consecutive weeks.