Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Align Technology Inc., FCFE 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).
The analysis of the cash flow data over the five-year period reveals notable fluctuations in both operational cash generation and free cash flow available to equity holders.
- Net Cash Provided by Operating Activities
- This metric exhibited an overall upward trend from 2018 to 2021, starting at $554,681 thousand in 2018 and peaking at $1,172,544 thousand in 2021. This represents a strong increase, especially between 2020 and 2021, indicating improving efficiency or higher revenues translating into operational cash inflows. However, in 2022, there is a significant decline to $568,732 thousand, nearly halving from the previous year's peak, which may warrant attention to operational challenges or changes in working capital management during that year.
- Free Cash Flow to Equity (FCFE)
- The FCFE also showed a general upward trajectory through 2021, rising from $331,369 thousand in 2018 to $771,446 thousand in 2021, reflecting a growing capacity to generate cash available for equity holders after capital expenditures and debt payments. The sharp increase from 2018 to 2019 suggests enhancements in capital structure or operational effectiveness. Similar to operating cash flow, FCFE declined noticeably in 2022, dropping to $276,832 thousand, representing a pronounced reduction in the cash distributable to shareholders and possibly indicating increased capital expenditures, debt servicing, or operational constraints in that period.
Price to FCFE Ratio, Current
Align Technology Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 76,589,114 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 276,832) |
| FCFE per share | 3.61 |
| Current share price (P) | 197.44 |
| Valuation Ratio | |
| P/FCFE | 54.62 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 38.48 |
| Elevance Health Inc. | 6.15 |
| Intuitive Surgical Inc. | 137.61 |
| Medtronic PLC | 16.03 |
| UnitedHealth Group Inc. | 6.82 |
| P/FCFE, Sector | |
| Health Care Equipment & Services | 14.25 |
| P/FCFE, Industry | |
| Health Care | 19.08 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Align Technology Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 76,610,319 | 78,795,494 | 79,132,723 | 78,753,161 | 79,989,347 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 276,832) | 771,446) | 507,258) | 597,563) | 331,369) | |
| FCFE per share3 | 3.61 | 9.79 | 6.41 | 7.59 | 4.14 | |
| Share price1, 4 | 304.64 | 512.56 | 567.11 | 218.35 | 258.97 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 84.31 | 52.35 | 88.47 | 28.78 | 62.51 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | 26.11 | 24.52 | 38.42 | — | — | |
| Elevance Health Inc. | 14.26 | 11.07 | 7.75 | — | — | |
| Intuitive Surgical Inc. | 89.67 | 58.39 | 81.15 | — | — | |
| Medtronic PLC | 19.71 | 38.91 | 23.06 | — | — | |
| UnitedHealth Group Inc. | 12.57 | 20.11 | 13.93 | — | — | |
| P/FCFE, Sector | ||||||
| Health Care Equipment & Services | 16.47 | 22.14 | 18.61 | — | — | |
| P/FCFE, Industry | ||||||
| Health Care | 18.40 | 17.94 | 17.51 | — | — | |
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 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 276,832,000 ÷ 76,610,319 = 3.61
4 Closing price as at the filing date of Align Technology Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 304.64 ÷ 3.61 = 84.31
6 Click competitor name to see calculations.
The financial data reveals several significant trends related to valuation metrics and free cash flow per share over the examined periods.
- Share Price
- The share price exhibits considerable volatility. Starting at $258.97 at the end of 2018, it declined to $218.35 in 2019 before sharply increasing to $567.11 by the end of 2020. This peak was followed by a decrease to $512.56 in 2021 and a further decline to $304.64 in 2022. Overall, while the share price increased substantially from 2018 to 2020, the subsequent two years show a downward correction.
- Free Cash Flow to Equity (FCFE) per Share
- The FCFE per share generally increased from $4.14 in 2018 to a peak of $9.79 in 2021, indicating improved cash generation available to equity shareholders. However, there is a notable decline to $3.61 in 2022, which may reflect operational challenges or increased capital expenditures.
- Price to FCFE Ratio (P/FCFE)
- The P/FCFE ratio shows significant fluctuations that reflect changing market expectations relative to the company's free cash flow generation. It started at 62.51 in 2018, decreased markedly to 28.78 in 2019, and then surged to a high of 88.47 in 2020. The ratio decreased again in 2021 to 52.35 before rising to 84.31 in 2022. These variations suggest shifts in investor sentiment, which may be driven by performance outlook or broader market conditions.
In summary, while the company experienced strong growth in both share price and FCFE per share up to 2020 and 2021 respectively, there is evidence of a correction phase and declining cash flow performance in 2022. The P/FCFE ratio's volatility highlights changing investor confidence and valuation adjustments over the period.