Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Align Technology Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 Invested capital. See details »
- Market (fair) value of Align
- The market value of the company displayed notable fluctuations over the five-year period. Beginning at approximately $20.7 billion in 2018, it declined significantly to about $16.9 billion in 2019. A sharp rebound followed in 2020, with the market value more than doubling to around $44.96 billion, reaching its peak in this timeframe. Subsequently, the market value experienced a decrease to approximately $40.3 billion in 2021, followed by a further substantial drop to about $23.4 billion in 2022. Overall, the market value exhibited high volatility, characterized by a pronounced peak in 2020, and substantial corrections thereafter.
- Invested capital
- Invested capital demonstrated a consistent upward trend throughout the analyzed period. Starting at roughly $1.52 billion in 2018, the figure increased marginally in 2019, followed by more significant growth in the subsequent years. By the end of 2022, invested capital reached approximately $3.34 billion, more than doubling the initial value. This steady increase suggests ongoing investments or asset accumulation within the company.
- Market value added (MVA)
- Market value added closely mirrored the pattern observed in the market value. After a decrease from nearly $19.2 billion in 2018 to around $15.4 billion in 2019, MVA markedly increased to approximately $42.5 billion in 2020, signifying substantial value creation relative to invested capital. Subsequent years saw a decline to $37.3 billion in 2021 and a sharper reduction to about $20 billion in 2022. Despite these decreases, MVA at the end of the period remained considerably higher than the initial 2018 level, indicating sustained value creation, albeit with considerable volatility.
- Overall insights
- The data reflects a company experiencing significant market valuation shifts, with pronounced peaks and troughs between 2018 and 2022. While invested capital steadily increased over this period, suggesting ongoing capital deployment, the corresponding market valuation and market value added underwent substantial volatility, peaking in 2020. This pattern might indicate sensitivity to external market conditions or internal developments influencing investor perception and value realization. The divergence between steadily increasing invested capital and fluctuating market valuation highlights periods of both strong market confidence and corrective adjustments.
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MVA Spread Ratio
Align Technology Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 20,021,487) | 37,324,891) | 42,503,935) | 15,412,338) | 19,197,695) | |
| Invested capital2 | 3,344,477) | 2,990,610) | 2,459,204) | 1,524,413) | 1,516,250) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 598.64% | 1,248.07% | 1,728.36% | 1,011.03% | 1,266.13% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | 230.60% | 266.78% | — | — | — | |
| Elevance Health Inc. | 108.49% | 116.25% | — | — | — | |
| Intuitive Surgical Inc. | 1,400.02% | 2,002.36% | — | — | — | |
| Medtronic PLC | 93.80% | 163.10% | — | — | — | |
| UnitedHealth Group Inc. | 214.27% | 265.59% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 20,021,487 ÷ 3,344,477 = 598.64%
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits significant fluctuation over the five-year period. Starting at approximately 19.2 billion USD in 2018, it declined to around 15.4 billion USD in 2019. The value then increased substantially, peaking at over 42.5 billion USD in 2020, before dropping to about 37.3 billion USD in 2021 and further decreasing to approximately 20 billion USD by the end of 2022. This pattern indicates a volatile market valuation with a notable peak in 2020 followed by a gradual decline.
- Invested Capital
- Invested capital shows a consistent upward trend throughout the period under review. The value started near 1.5 billion USD in 2018 and increased steadily each year, reaching approximately 3.3 billion USD in 2022. This steady growth suggests ongoing investment and capital expansion within the company across these years.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, reflects the relationship between market value added and invested capital. The ratio fell from 1266.13% in 2018 to 1011.03% in 2019, then surged to its highest point at 1728.36% in 2020. Subsequently, it declined to 1248.07% in 2021 and further decreased to 598.64% in 2022. Despite the downward trend after 2020, the ratio remains relatively high, indicating that the market value added has remained significantly above the invested capital, albeit with diminished margins in the final years.
- Summary
- Overall, the financial data reveals a period of significant growth in market value added and invested capital, with a peak in market value in 2020 followed by a decline over the next two years. Invested capital steadily increased, indicating ongoing investment activity. The MVA spread ratio mirrors the fluctuations in market value added, highlighting strong market valuation relative to invested capital in 2020, with a notable reduction in relative value creation by 2022. The trends suggest that while the company expanded its capital base continuously, market perceptions of its value experienced volatility, particularly declining after 2020.
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MVA Margin
Align Technology Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 20,021,487) | 37,324,891) | 42,503,935) | 15,412,338) | 19,197,695) | |
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Add: Increase (decrease) in deferred revenues | 214,751) | 449,116) | 241,173) | 189,076) | 137,888) | |
| Adjusted net revenues | 3,949,386) | 4,401,700) | 2,713,114) | 2,595,872) | 2,104,380) | |
| Performance Ratio | ||||||
| MVA margin2 | 506.95% | 847.97% | 1,566.61% | 593.72% | 912.27% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | 323.76% | 384.46% | — | — | — | |
| Elevance Health Inc. | 46.56% | 54.23% | — | — | — | |
| Intuitive Surgical Inc. | 1,209.45% | 1,575.51% | — | — | — | |
| Medtronic PLC | 205.92% | 391.27% | — | — | — | |
| UnitedHealth Group Inc. | 109.81% | 130.39% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted net revenues
= 100 × 20,021,487 ÷ 3,949,386 = 506.95%
3 Click competitor name to see calculations.
The financial data reveals significant fluctuations in key performance indicators over the five-year period from 2018 to 2022. Market value added (MVA) exhibited a notable increase, peaking in 2020 before declining again in subsequent years. Specifically, MVA rose from approximately 19.2 billion in 2018 to over 42.5 billion in 2020, representing more than a doubling, then decreased to around 20.0 billion by the end of 2022. This pattern suggests a period of considerable value creation followed by a sizeable contraction.
Adjusted net revenues showed a generally upward trend with some variability. Starting at approximately 2.1 billion in 2018, adjusted net revenues increased steadily, reaching a high of about 4.4 billion in 2021. However, there was a decline in 2022 to roughly 3.9 billion, indicating a potential challenge in maintaining revenue growth after peaking.
The MVA margin, which measures the efficiency of value creation relative to revenues, mirrored the volatility observed in MVA. The margin decreased from a high of 912.27% in 2018 to 593.72% in 2019, then surged sharply to 1566.61% in 2020. After 2020, the margin again declined to 847.97% in 2021 and further to 506.95% in 2022. This indicates that while the company achieved high value creation relative to revenues in 2020, this efficiency diminished in the following years.
- Market Value Added (MVA)
- Increased substantially from 2018 to 2020, followed by a notable decline through 2022.
- Adjusted Net Revenues
- Showed steady growth until 2021 with a decline in 2022, suggesting revenue pressures despite prior gains.
- MVA Margin
- Experienced sharp fluctuations, peaking dramatically in 2020, then decreasing considerably by 2022.
Overall, the data indicates a cycle of rapid growth and strong value creation around 2020, followed by a period of contraction in both market value added and relative efficiency in recent years. The decline in adjusted net revenues in 2022 further implies possible external challenges or internal performance issues affecting financial outcomes.
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