Align Technology, Inc. (ALGN)
Quantitative Summary
DeterministicAt 29.4x earnings — a 55% discount to the sector average of 65.2x — ALGN is in the lower valuation range. Financial health metrics are strong: Piotroski 7/9, Altman Z 5.1 (above 3.0 safe zone threshold). DCF fair value of $139 implies 23% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedAlign Technology presents a classic value trap profile where robust profitability metrics mask deteriorating capital efficiency. While the company maintains a healthy DuPont ROE decomposition driven by strong net margins of 10.2% and moderate leverage, this return is being eroded by an ROIC-WACC spread of -5.1%, indicating that current investments are failing to cover the cost of capital. This fundamental disconnect is reinforced by stagnant revenue growth of just 0.9% YoY despite a high gross margin of 67.2%, suggesting top-line momentum has stalled. Quality indicators remain mixed; the Piotroski F-Score of 7/9 signals strong financial health, and the Beneish M-Score of -2.50 effectively rules out earnings manipulation risks, yet an Altman Z-Score of 5.0 places the firm in a vulnerable zone relative to its peers under stress scenarios.
Valuation metrics further complicate the investment thesis by pricing in future growth that current fundamentals do not support. The stock trades at a P/E ratio of 30.7x, which sits meaningfully below the sector average of 37.0x, yet this discount is contradicted by a DCF model implying -19.4% downside to a fair value of $138. This discrepancy arises because the market appears to be pricing in an aggressive 19.5% ten-year free cash flow growth rate that has not materialized given the near-zero recent revenue expansion. Consequently, the valuation gap suggests the current price embeds optimistic assumptions about future operational acceleration that are inconsistent with the company's present trajectory.
Risk factors and factor exposure analysis highlight significant headwinds for long-term alpha generation. The stock exhibits a negative Fama-French annual alpha of -2.45%, underscoring its failure to outperform risk-adjusted benchmarks over time, while the Value Factor (HML) score of -0.181 confirms an excessive growth tilt that has underperformed value strategies recently. Compounding these structural issues is a 90-day insider net selling flow totaling $1.5 million, which often precedes or accompanies periods of diminished confidence in near-term prospects. Collectively, the convergence of negative capital returns, unfulfilled growth expectations, and active insider distribution creates an asymmetric risk profile where downside potential outweighs available margin of safety.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 1% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 13.8% | 15.8% | 17.8% |
|---|---|---|---|
| 2% | $155 | $132 | $115 |
| 3% | $165 | $139 | $120 |
| 4% | $177 | $147 | $125 |
Center = base case. Green = >10% upside, Red = >10% downside vs $166.69.
Pre-computed DCF: WACC=15.8%, terminal growth 3%. Fair value $139 (-23.1%). Not investment advice.
Valuation Context
Currently trading 2% above its 5-year average P/E of 30.1x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedAlign Technology's current share price of $163.61 establishes a specific point within its recent volatility range, offering a snapshot for assessing relative value without projecting future direction. In the absence of explicit moving average envelope data in the provided dataset, the analysis relies solely on this single price coordinate to gauge market positioning. This level serves as a baseline reference against which traders might mentally compare historical support or resistance zones, though definitive conclusions regarding mean-reversion potential require additional context such as standard deviation bands or long-term trend lines that are currently unavailable. The sector classification within Healthcare provides broader industry backdrop but does not inherently dictate the stock's immediate technical behavior without corroborating volume or momentum data. Observing the price at this specific figure allows for a neutral assessment of where the asset sits relative to unknown recent averages, leaving room for interpretation on whether it is trading near fair value or exhibiting deviation from its historical norm. Any implication of potential mean reversion remains theoretical pending further technical confirmation beyond the solitary price point offered here. Ultimately, this isolated data point functions as an entry marker rather than a comprehensive signal for directional bias. Market participants must weigh this $163.61 level against their own internal models or external charting tools to determine if it represents an attractive zone for accumulation or distribution. The lack of supplementary indicators means the setup is purely descriptive, requiring the reader to apply personal risk parameters and broader market sentiment before forming a strategy around these coordinates.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XHE or VBR, the fund manager is mechanically forced to buy or sell ALGN shares regardless of Align Technology, Inc.'s individual fundamentals. We estimate $1.4B of passive capital is structurally linked to ALGN through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Align Technology, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Align Technology, Inc. (ALGN) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies ELI LILLY + CO (LLY) as the most exposed collateral stock, sharing 1 ETFs with ALGN. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 22 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
ALGN Ownership Dynamics
Passive funds hold 1 in every 9 ALGN shares, reducing daily market volatility.
Align Technology, Inc. (ALGN) exerts measurable gravity on the passive index market, currently representing 1.6% of the XHE (XHE) and 0.3% of the VBR (VBR). Across 22 tracked ETFs, approximately 8M shares (11.6% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest ALGN Exposure
Float lock-up computed from 22 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
ALGN Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Align Technology, Inc. over the past year sits near $132.79 (11% of 252-day volume). The current price of $166.69 trades 25.5% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
ALGN Capital Efficiency
How efficiently does Align Technology, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Align Technology, Inc. converts 60% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. However, the ROIC-WACC spread is negative (-5.1%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 7,908 | $161.75 | $1.3M |
| 2026-05-13 | 2,238 | $165.79 | $371,038.02 |
| 2026-05-12 | 43,030 | $164.61 | $7.1M |
| 2026-05-07 | 159 | $173.94 | $27,656.46 |
| 2026-04-23 | 5,402 | $196.05 | $1.1M |
| 2026-04-22 | 277 | $195.20 | $54,070.4 |
| 2026-04-20 | 9,273 | $190.07 | $1.8M |
| 2026-04-17 | 1,749 | $185.02 | $323,599.98 |
| 2026-04-15 | 3 | $184.69 | $554.07 |
| 2026-03-30 | 2,102 | $166.38 | $349,730.76 |
| 2026-03-25 | 7 | $179.34 | $1,255.38 |
| 2026-03-24 | 56,789 | $180.86 | $10.3M |
| 2026-03-23 | 57,815 | $173.18 | $10.0M |
| 2026-03-20 | 50,882 | $176.25 | $9.0M |
| 2026-03-18 | 2 | $176.12 | $352.24 |
| 2026-03-09 | 118 | $174.00 | $20,532 |
| 2026-02-26 | 268 | $188.05 | $50,397.4 |
| 2026-02-25 | 3,303 | $185.53 | $612,805.59 |
| 2026-02-23 | 100 | $190.02 | $19,002 |
| 2026-02-13 | 3 | $183.86 | $551.58 |
| 2026-01-30 | 319 | $164.12 | $52,354.28 |
| 2026-01-20 | 301 | $171.49 | $51,618.49 |
| 2026-01-07 | 125 | $167.66 | $20,957.5 |
| 2025-12-30 | 177 | $157.84 | $27,937.68 |
| 2025-12-12 | 53,030 | $163.87 | $8.7M |
| 2025-12-10 | 30 | $159.00 | $4,770 |
| 2025-12-08 | 8,846 | $157.21 | $1.4M |
| 2025-12-05 | 5,477 | $156.84 | $859,012.68 |
| 2025-12-03 | 8 | $150.93 | $1,207.44 |
| 2025-12-01 | 100 | $147.19 | $14,719 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| BAX | 0.644 | 0.439 | Moderate |
| CSL | 0.616 | 0.449 | Moderate |
| XRAY | 0.542 | 0.560 | Moderate |
| IP | 0.494 | 0.336 | Moderate |
| EXR | 0.485 | 0.211 | Moderate |
| ATI | 0.477 | 0.307 | Moderate |
| CFR | 0.468 | 0.465 | Moderate |
| FTV | 0.457 | 0.503 | Moderate |
| VRTPX | 0.448 | 0.450 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare ALGN to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.