Align Technology Inc. (NASDAQ:ALGN)

Total Asset Turnover

Reported total asset turnover decreased markedly from 0.96 in 2018 and 2019 to 0.51 in 2020, with a slight recovery to 0.67 in 2021, followed by a modest decline to 0.63 in 2022. Adjusted total asset turnover shows a similar pattern but with less volatility, peaking at 1.06 in 2019, dropping to 0.83 in 2020, then recovering to 1.0 in 2021 and declining slightly to 0.9 in 2022. Overall, asset utilization efficiency declined during 2020 and remained below earlier levels in subsequent years.

Current Ratio

The reported current ratio shows a steady decline from 1.88 in 2018 to 1.26 in 2022, indicating a gradual reduction in short-term liquidity. In contrast, the adjusted current ratio also declines from 4.49 in 2018 to 3.32 in 2021 but increases again to 4.31 in 2022, suggesting that when adjusting for certain items, liquidity remains strong with some recovery in the latest period despite downward trends in reported data.

Debt Ratios

Reported debt to equity and debt to capital ratios are not available. The adjusted debt to equity ratio remains very low and relatively stable, fluctuating between 0.03 and 0.07 from 2018 to 2022, indicating minimal leverage. Adjusted debt to capital mirrors this low leverage profile, maintaining values at or below 0.06 throughout the period.

Financial Leverage

Reported financial leverage oscillates between 1.49 and 1.86, peaking in 2019 at 1.86, dipping to 1.49 in 2020, and returning near previous levels in 2021 and 2022. Adjusted financial leverage remains more stable and lower overall, gradually decreasing from 1.3 in 2018 to 1.22 in 2022, signaling cautious use of debt financing.

Net Profit Margin

Reported net profit margin shows a highly irregular trend, with a significant spike to 71.84% in 2020, but falling sharply to 19.53% in 2021 and further to 9.68% in 2022. Adjusted net profit margin is more consistent, ranging from 21.22% to 27.18% between 2018 and 2021, before declining notably to 13.24% in 2022, suggesting underlying profitability dropped in the last period after stable performance.

Return on Equity (ROE)

Reported ROE follows a similar erratic pattern as net profit margin, surging to 54.92% in 2020, then falling to 21.31% in 2021 and 10.04% in 2022. Adjusted ROE is steadier but experiences a decline from a peak of 34.84% in 2021 to 14.55% in 2022, indicating reduced shareholder returns in the latest year after prior growth and volatility.

Return on Assets (ROA)

Reported ROA dramatically spikes in 2020 to 36.77% from approximately 17-19% in earlier years, then declines steadily to 6.08% by 2022. Adjusted ROA exhibits a more moderate increase in 2021 to 27.08%, then drops significantly to 11.92% in 2022. This pattern reflects considerable fluctuations in asset profitability, with a pronounced decrease in the most recent year.

The analysis of the annual financial data reveals several notable trends relating to revenues, assets, and asset efficiency over the five-year period.

Net Revenues

Net revenues increased steadily from 2018 through 2020, rising from approximately US$1.97 billion to about US$2.47 billion. A significant jump occurred in 2021, reaching nearly US$3.95 billion, followed by a slight decline to approximately US$3.73 billion in 2022.

Total Assets

Total assets showed continuous growth throughout the period, starting at around US$2.05 billion in 2018 and climbing to nearly US$5.95 billion in 2021. The total asset value plateaued somewhat in 2022, remaining close to the 2021 level at approximately US$5.95 billion.

Reported Total Asset Turnover

This ratio, which measures how efficiently assets generate revenues, was stable at 0.96 in both 2018 and 2019 but declined sharply in 2020 to 0.51, indicating decreased efficiency amid rapidly increasing assets. It moderately improved to 0.67 in 2021 and then slightly declined to 0.63 in 2022, reflecting ongoing challenges in asset utilization despite higher asset bases.

Adjusted Net Revenues

Adjusted net revenues, reflecting revenue normalization, trended similarly to reported net revenues. They rose consistently from about US$2.10 billion in 2018 to US$2.71 billion in 2020, followed by a notable increase to US$4.40 billion in 2021. In 2022, they declined to roughly US$3.95 billion.

Adjusted Total Assets

Adjusted total assets initially increased moderately from approximately US$2.10 billion in 2018 to US$2.44 billion in 2019, then surged to about US$3.29 billion in 2020 and further to US$4.42 billion in 2021. The value slightly decreased to roughly US$4.39 billion in 2022, indicating some possible asset revaluation or disposals.

Adjusted Total Asset Turnover

Adjusted asset turnover was stable at 1.00 in 2018, increased to 1.06 in 2019, declined to 0.83 in 2020, rebounded to 1.00 in 2021, and then decreased to 0.90 in 2022. These fluctuations suggest varying efficiency in generating revenues from adjusted assets, with a notable dip in 2020 followed by partial recovery and a slight downturn thereafter.

Overall, the data indicate robust growth in both revenues and assets, particularly marked by significant increases in 2021. However, efficiency metrics related to asset turnover reveal periods of reduced asset productivity, especially in 2020. The partial recovery in 2021 and slight decreases in 2022 suggest fluctuations in operational effectiveness relative to asset base expansions. The trends emphasize the importance of managing asset utilization to sustain revenue growth effectively.

Current assets and liabilities

The current assets increased steadily from approximately 1.3 billion USD in 2018 to about 2.5 billion USD in 2021, followed by a slight decline to around 2.4 billion USD in 2022. Current liabilities exhibited a consistent upward trend, rising from roughly 692 million USD in 2018 to nearly 1.9 billion USD in 2022, with the most significant growth occurring between 2019 and 2021.

Reported current ratio

The reported current ratio showed a continuous decrease over the reported years, dropping from 1.88 in 2018 to 1.26 in 2022. This decline indicates a reduction in the company's short-term liquidity when considering unadjusted current assets and liabilities, suggesting that the company's ability to cover short-term obligations with its current assets has weakened over time.

Adjusted current assets and liabilities

Adjusted current assets followed a similar increasing trend as reported current assets, growing from approximately 1.3 billion USD in 2018 to about 2.5 billion USD in 2021, before a slight decrease in 2022. Adjusted current liabilities also increased but showed variability in growth rates, rising from roughly 290 million USD in 2018 to a peak of 755 million USD in 2021, then decreasing noticeably to about 564 million USD in 2022.

Adjusted current ratio

Unlike the reported current ratio, the adjusted current ratio declined from 4.49 in 2018 to 3.32 in 2021 but then rebounded significantly to 4.31 in 2022. This pattern suggests that when considering adjusted figures, the company's short-term liquidity remained at a stronger level throughout the period and improved notably in the last year, highlighting a potentially more favorable liquidity position than the reported ratio indicates.

Summary insights

The overall trends demonstrate an expanding scale of current assets and liabilities over the five-year span. The divergence between reported and adjusted current ratios indicates that adjusted figures may provide a more optimistic view of liquidity. Despite the reported current ratio declining consistently, the adjusted current ratio's rebound in 2022 suggests an improvement in liquidity quality or composition. This highlights the importance of adjustments in presenting a comprehensive understanding of the company's short-term financial health.

The financial data reveals several notable trends in the company's capital structure over the observed five-year period.

Stockholders’ equity

Stockholders’ equity shows a steady increase from 1,252,891 thousand US dollars at the end of 2018 to a peak of 3,623,714 thousand US dollars in 2021, followed by a slight decline to 3,601,358 thousand US dollars in 2022. This indicates strong growth in the company’s net asset base over the majority of the period, with a marginal decrease in the last year reviewed.

Adjusted total debt

The adjusted total debt starts at 106,676 thousand US dollars in 2018 and declines significantly to 59,200 thousand US dollars in 2019. It then rises moderately over the following years to 126,908 thousand US dollars by 2022. Despite this upward trend in the latter years, the debt remains relatively low compared to equity figures.

Adjusted stockholders’ equity

Adjusted stockholders’ equity exhibits consistent growth throughout the period, increasing from 1,609,786 thousand US dollars in 2018 to 3,591,999 thousand US dollars in 2022. The continuous rise underscores expanding net assets when adjusted for relevant factors, aligning with the trends seen in reported equity.

Adjusted debt to equity ratio

The adjusted debt to equity ratio remains consistently low, ranging from 0.07 in 2018 down to 0.03 in 2019 and 2020, before slightly increasing to 0.04 in 2021 and holding stable through 2022. This indicates that the company maintains a conservative leverage position with a relatively low proportion of debt in its capital structure.

Total debt and reported debt to equity

There is no data available for total debt and reported debt to equity for the periods in question, which limits analysis of these particular metrics.

Overall, the company's financial structure appears to be characterized by robust equity growth coupled with low and manageable levels of debt, as evidenced by the low adjusted debt to equity ratios. The slight increase in adjusted total debt since 2019 has not materially altered the conservative leverage profile. The small decrease in stockholders' equity in 2022 may warrant further investigation but does not significantly detract from the overall positive trend in equity expansion.

Total Capital

The total capital exhibited a substantial increase from 2018 through 2020, growing from approximately 1.25 billion to over 3.23 billion US dollars. This growth trend continued, albeit at a slower pace, reaching around 3.62 billion in 2021 and slightly declining to approximately 3.60 billion in 2022.

Adjusted Total Debt

The adjusted total debt showed fluctuations over the analyzed period. It started at approximately 107 million US dollars in 2018, decreased significantly to about 59 million in 2019, then increased to roughly 86 million in 2020. Afterward, the debt rose again to about 125 million in 2021 and remained relatively stable, with a minor increase to approximately 127 million in 2022.

Adjusted Total Capital

Adjusted total capital demonstrated steady growth throughout the years. Beginning at approximately 1.72 billion US dollars in 2018, it rose consistently to reach close to 3.72 billion by the end of 2022, reflecting an overall positive trajectory with substantial expansions particularly between 2019 and 2022.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio remained low and stable, ranging from 0.06 in 2018 to 0.03 in both 2019 and 2020. Although there was a slight increase to 0.04 in 2021, the ratio decreased again to 0.03 in 2022. This indicates the company's debt relative to its capital remained conservatively managed, emphasizing a low leverage position over the period.

Overall Trends and Insights

The data reveals a pattern of significant capital growth coupled with relatively stable and low adjusted debt levels. The company's leverage has remained minimal, indicating cautious debt management despite the increase in capital base. The slight variability in adjusted total debt suggests periodic debt adjustments or refinancing activities but does not significantly impact the low debt-to-capital ratios. The overall financial structure appears to favor equity and low indebtedness, supporting a solid capital foundation.

The financial data reveals several notable trends in the company's asset base, equity, and leverage metrics over the five-year period analyzed.

Total Assets

Total assets exhibited substantial growth from 2018 to 2022. The company more than doubled its asset base, increasing from approximately $2.05 billion in 2018 to nearly $5.95 billion in 2022. The most significant year-over-year increase occurred between 2019 and 2020, when total assets jumped by about 93%, indicating possible major acquisitions, investments, or capital expenditures during that period. Overall, growth slowed somewhat after 2020 but remained positive through 2022.

Stockholders’ Equity

Stockholders’ equity also increased steadily, rising from around $1.25 billion in 2018 to approximately $3.60 billion by the end of 2022. Similar to total assets, the equity experienced a pronounced increase between 2019 and 2020, nearly doubling. From 2020 onward, the equity growth rate tapered but maintained an upward trajectory. The relative stability of equity growth after 2020 suggests ongoing profitability and retention of earnings.

Reported Financial Leverage

The reported financial leverage ratio fluctuated within a narrow band between 1.49 and 1.86 over the period. It peaked at 1.86 in 2019, declined sharply to 1.49 in 2020, and then hovered near 1.64–1.65 from 2021 to 2022. This pattern indicates a reduction in leverage in 2020, possibly due to the equity increase outpacing debt or other liabilities. The leverage then stabilized, reflecting a balanced approach to financing.

Adjusted Total Assets

Adjusted total assets present a different perspective, showing a steadier increase from approximately $2.10 billion in 2018 to around $4.39 billion in 2022. This adjusted figure grows at a slower rate compared to reported total assets, especially noticeable between 2019 and 2020, suggesting that some portion of asset growth in the reported figure may pertain to non-operational or non-recurring items removed in the adjustment.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity follows a consistent upward trend from about $1.61 billion in 2018 to approximately $3.59 billion in 2022. The growth appears more gradual and stable compared to the reported equity, indicating conservative adjustments that might exclude certain intangible or revaluation reserves. The steady rise implies solid core equity strengthening over time.

Adjusted Financial Leverage

The adjusted financial leverage ratio remained relatively stable and low, ranging from 1.22 to 1.3 across the five years. This steady decrease from 1.3 in 2018 to 1.22 in 2022 suggests an improvement in capital structure and lower reliance on debt or liabilities relative to equity when considering adjustments. The stability of this ratio points to prudent financial management and consistent equity backing.

In summary, the company demonstrates strong asset and equity growth over the analyzed period, with evidence of conservative and improving financial leverage when adjusted figures are considered. The divergence between reported and adjusted metrics highlights the importance of analyzing both to understand the underlying financial health. The data suggests a phase of significant expansion around 2020 followed by stabilization and continuous strengthening of the balance sheet.

The financial data reveals several notable trends over the five-year period from 2018 to 2022.

Net Income

Net income displayed a strong upward trend from 2018 through 2020, rising from $400.2 million to a peak of $1.78 billion in 2020. However, following this peak, net income declined significantly, falling to $772.0 million in 2021 and further down to $361.6 million in 2022. This indicates a sharp contraction after the 2020 high point.

Net Revenues

Net revenues consistently increased from $1.97 billion in 2018 to $3.95 billion in 2021. However, 2022 saw a reduction in net revenues to approximately $3.73 billion, reflecting a slight slowdown or revenue contraction compared to the prior year.

Reported Net Profit Margin

The reported net profit margin exhibited significant volatility. After declining from 20.35% in 2018 to 18.4% in 2019, it surged dramatically to 71.84% in 2020, a notable outlier. Subsequently, the margin reverted closer to previous levels, dropping to 19.53% in 2021 and further down to 9.68% in 2022, suggesting reduced profitability relative to revenues during the last year.

Adjusted Net Income

The adjusted net income increased steadily from $523.6 million in 2018 to $639.3 million in 2019. It slightly declined to $575.7 million in 2020, then experienced a considerable rebound to $1.20 billion in 2021 before declining sharply to $522.8 million in 2022. This pattern mirrors the net income trend but with less extreme fluctuations.

Adjusted Net Revenues

Adjusted net revenues followed a steady upward trajectory from $2.10 billion in 2018 to $4.40 billion in 2021, before decreasing to around $3.95 billion in 2022, indicating a mild pullback after several years of strong growth.

Adjusted Net Profit Margin

The adjusted net profit margin remained relatively stable between 2018 and 2020, ranging from approximately 21% to 25%. It peaked at 27.18% in 2021, reflecting enhanced profitability, but then dropped to 13.24% in 2022, denoting a significant contraction in profitability margins.

Overall, the company experienced strong growth in revenues and income through 2020 and 2021, with a remarkable, though likely abnormal, spike in reported net profit margin during 2020. However, 2022 exhibited a reversal in these positive trends, marked by reductions in revenues, net income, and profit margins, which may signal emerging challenges affecting both profitability and top-line growth.

The financial data reveals notable fluctuations in profitability and equity metrics over the five-year period. Net income experienced substantial growth from 2018 to 2020, reaching a peak of approximately 1.78 billion USD in 2020, before declining sharply in the subsequent years, falling to around 361.6 million USD by 2022.

Stockholders’ equity showed an overall upward trend, increasing significantly between 2018 and 2021, rising from approximately 1.25 billion USD to over 3.6 billion USD, then stabilizing with a slight decline in 2022. This growth in equity aligns with the general increase in the company's asset base and retained earnings, although the tapering off in 2022 may suggest adjustments or distribution of capital.

Reported Return on Equity (ROE) peaked dramatically in 2020 at nearly 55%, which corresponds with the net income spike of that year. However, this metric saw a steep decline thereafter, dropping to about 10% in 2022, indicating a diminished efficiency in generating profits from shareholders' equity during the latter period.

When considering adjusted figures, which presumably account for one-time items or non-recurring charges, adjusted net income followed a different pattern. It showed growth from 2018 to 2019, a decline in 2020, and then an increase in 2021 before dropping again in 2022. This suggests that 2020’s net income spike may include non-recurring factors, as the adjusted net income does not reflect a similar peak.

Adjusted stockholders’ equity steadily increased over the entire period, from approximately 1.61 billion USD in 2018 to about 3.59 billion USD in 2022. This steady rise contrasts with the fluctuations seen in net income and supports a view of cautious yet consistent equity growth when adjustments are considered.

Adjusted ROE trends further confirm the impact of volatility in net income. Starting from around 32.5% in 2018, the adjusted ROE slightly increased in 2019, then declined substantially in 2020 to just above 22%. It rebounded to about 34.8% in 2021 before dropping to approximately 14.6% in 2022. This pattern indicates a more moderate and less volatile return profile than the reported ROE, reflecting the smoothing effect of adjustments.

Overall, the data reflects a phase of rapid profit growth culminating in 2020, followed by a notable contraction in profitability in the following years. Equity growth remained more stable, though somewhat moderated in 2022. The divergence between reported and adjusted results points to the presence of significant non-recurring items influencing profitability measures during this period. The declining ROE in recent years signals challenges in maintaining high profit generation relative to equity, suggesting a more cautious outlook on operational efficiency and capital utilization moving forward.

The financial data reveals several noteworthy trends in the company's performance from 2018 through 2022. Net income shows a significant fluctuation over the period. Initially, net income increases steadily from 400,235 thousand US dollars in 2018 to a peak of 1,775,888 thousand US dollars in 2020. This is followed by a sharp decline in the subsequent years, falling to 772,020 thousand US dollars in 2021 and further down to 361,573 thousand US dollars in 2022.

Total assets exhibit consistent growth across the entire period. The asset base more than doubles from 2,052,458 thousand US dollars in 2018 to 5,947,947 thousand US dollars in 2022, indicating expansion and possibly increased investments or acquisitions.

Reported Return on Assets (ROA)

The reported ROA mirrors the volatility seen in net income. Starting at 19.5% in 2018, it experiences a mild decrease to 17.71% in 2019, then sharply rises to a high of 36.77% in 2020. Following this peak, there is a rapid decline to 12.99% in 2021 and a further reduction to 6.08% in 2022. This trend suggests that while asset efficiency was exceptionally high in 2020, it diminished considerably afterward.

Adjusted Net Income

Adjusted net income displays a different pattern. It rises steadily from 523,578 thousand US dollars in 2018 to 639,256 thousand in 2019, dips to 575,652 thousand in 2020, then surges to a peak of 1,196,495 thousand in 2021, before declining to 522,792 thousand in 2022. The adjusted figures smooth out some of the volatility seen in the reported net income but still indicate a peak in 2021 and a substantial drop afterward.

Adjusted Total Assets

Adjusted total assets grow steadily from 2,096,823 thousand US dollars in 2018 to 4,386,544 thousand in 2022. The rate of growth is more moderate compared to the unadjusted total assets, especially noticeable in the jump from 3,287,091 thousand in 2020 to 4,417,588 thousand in 2021.

Adjusted Return on Assets (ROA)

The adjusted ROA begins at 24.97% in 2018 and increases to 26.16% in 2019. It then declines to 17.51% in 2020 but remarkably rebounds to 27.08% in 2021 before dropping sharply to 11.92% in 2022. This pattern reflects fluctuations in asset efficiency, with 2021 marking a high point.

Overall, the data reflects a period of growth in asset base accompanied by volatile net income and asset utilization efficiency. The year 2020 appears to be a turning point with peak reported ROA and net income followed by declines in subsequent years. The adjusted figures indicate a smoother trend but convey a similar message of fluctuating profitability and returns, with the best performance around 2020-2021 and a marked decrease in 2022. This suggests potential challenges in maintaining profitability relative to the asset size in the most recent year.