Enterprise Value to FCFF (EV/FCFF)
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- Income Statement
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Aggregate Accruals
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Free Cash Flow to The Firm (FCFF)
Align Technology Inc., FCFF 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).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities exhibited a general upward trend from 2018 to 2021. Beginning at approximately $554.7 million in 2018, the figure increased significantly to around $747.3 million in 2019. In 2020, there was a modest decline to about $662.2 million, followed by a substantial rise to approximately $1.17 billion in 2021. However, in 2022, a sharp decrease occurred, bringing the value down to roughly $568.7 million, which is below the levels reported in 2019 and 2020. This pattern indicates a strong operational cash generation capability, peaking in 2021, but with a notable contraction in the most recent year reported.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm also demonstrated considerable variability over the five-year period. Starting at approximately $331.4 million in 2018, FCFF more than doubled to about $597.6 million in 2019, indicating improved cash generation after capital expenditures. In 2020, FCFF declined to around $507.3 million, yet remained higher than 2018 levels. The year 2021 saw an increase to approximately $771.4 million, marking the highest point in the observed timeframe. However, this positive trend reversed in 2022 with a significant drop to roughly $276.8 million, the lowest in the five-year span. This decline suggests increased capital expenditures, reduced operating cash flow, or both, impacting the free cash flow available to the firm.
- Overall Insights
- Both key cash flow metrics indicate strong performance growth through 2021, followed by a sharp decline in 2022. The peak in 2021 signifies a period of robust operational efficiency and capital management. The subsequent fall in 2022 points to potential challenges in maintaining cash flow levels, necessitating further investigation into the underlying causes such as changes in operating results, investment activities, or financing decisions.
Interest Paid, Net of Tax
Align Technology Inc., interest paid, net of tax calculation
US$ 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 2022 Calculation
Interest paid, tax = Interest paid × EITR
= × =
The analysis of the effective income tax rate over the five-year period reveals a consistent upward trend. Starting at 12.4% in 2018, the rate increased substantially to 20% in 2019. This upward movement continued more moderately in 2020 and 2021 with rates of 21% and 23.7%, respectively. The most significant rise occurred in 2022 when the rate sharply increased to 39.6%, representing a notable jump compared to prior years.
No data is available for the interest paid, net of tax, for any of the reported years, thus no analysis can be conducted on this item.
- Effective income tax rate (EITR)
- There is a clear and continuous increase from 12.4% in 2018 to 39.6% in 2022, indicating a higher tax burden on the company over the years. This trend may impact the company's net profitability and could indicate changes in tax regulations, profitability mix, or effective tax planning strategies.
- Interest paid, net of tax
- No data available for analysis.
Enterprise Value to FCFF Ratio, Current
Align Technology Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Abbott Laboratories | |
| Elevance Health Inc. | |
| Intuitive Surgical Inc. | |
| Medtronic PLC | |
| UnitedHealth Group Inc. | |
| EV/FCFF, Sector | |
| Health Care Equipment & Services | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Align Technology Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Health Care Equipment & Services | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
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).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value declined significantly from 19.98 billion US dollars at the end of 2018 to about 16.33 billion by the end of 2019. It then increased sharply in 2020 to approximately 43.92 billion, before experiencing a decline in 2021 to 39.22 billion and a further decrease in 2022 to 22.34 billion. This pattern indicates a period of volatility with peak valuation in 2020 followed by a notable contraction over the next two years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow exhibited an upward trend from 331 million US dollars in 2018 to a peak of 771 million in 2021, suggesting an improvement in the company’s cash generation ability through this period. However, in 2022, free cash flow decreased considerably to 277 million, indicating a potential tightening in operational cash availability.
- EV to FCFF Ratio
- The EV/FCFF ratio showed notable fluctuations. Starting at a high level of 60.29 in 2018, it dropped significantly to 27.32 in 2019, implying a more favorable valuation relative to cash flow at that time. The ratio surged in 2020 to 86.58, reflecting a high enterprise value relative to free cash flow, before decreasing to 50.83 in 2021. In 2022, it increased again to 80.7, signaling a less attractive valuation benchmark compared to cash flow generation. These shifts suggest changing investor sentiment or operational performance impacting the market valuation multiples.