Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Align Technology Inc., current price multiples
| Align Technology Inc. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | Health Care Equipment & Services | Health Care | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | $197.44 | ||||||||||
| No. shares of common stock outstanding | 76,589,114 | ||||||||||
| Growth rate (g) | 34.50% | ||||||||||
| Earnings per share (EPS) | $4.72 | ||||||||||
| Next year expected EPS | $6.35 | ||||||||||
| Operating profit per share | $8.39 | ||||||||||
| Sales per share | $48.76 | ||||||||||
| Book value per share (BVPS) | $47.02 | ||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | 41.82 | 17.10 | 13.02 | 79.11 | 24.67 | 18.42 | 22.09 | 22.23 | |||
| Price to next year expected earnings | 31.09 | 15.56 | 11.61 | 70.00 | 24.29 | 16.01 | 19.90 | 20.06 | |||
| Price-earnings-growth (PEG) | 1.21 | 1.72 | 1.08 | 6.08 | 15.77 | 1.23 | 2.01 | 2.06 | |||
| Price to operating profit (P/OP) | 23.53 | 33.58 | 10.69 | 78.22 | 19.32 | 8.22 | 16.81 | 17.37 | |||
| Price to sales (P/S) | 4.05 | 5.46 | 0.44 | 22.00 | 3.43 | 0.67 | 1.56 | 3.25 | |||
| Price to book value (P/BV) | 4.20 | 4.81 | 1.88 | 11.18 | 2.40 | 2.86 | 4.06 | 5.51 | |||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Align Technology Inc., historical price multiples
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).
- Price to Earnings (P/E) Ratio
- The Price to Earnings ratio exhibits considerable variability over the five-year period. Initially, the ratio declined from 51.76 in 2018 to 25.27 in 2020, indicating a significant reduction in market valuation relative to earnings. However, from 2020 onward, the ratio increased sharply, reaching 64.55 by the end of 2022. This upward trend suggests that the market's expectations for future earnings growth rose substantially despite fluctuations in company performance or earnings levels.
- Price to Operating Profit (P/OP) Ratio
- This ratio shows pronounced volatility, with a decrease from 44.4 in 2018 to 31.7 in 2019, followed by a dramatic spike to 115.91 in 2020. After this peak, it reverted to lower values of 41.36 in 2021 and 36.32 in 2022. The sharp increase in 2020 may indicate an unusual compression in operating profit that year or a temporary surge in stock price, which then normalized in subsequent years. Overall, the data reflect fluctuating market assessments of operating profitability.
- Price to Sales (P/S) Ratio
- The Price to Sales ratio declined from 10.53 in 2018 to 6.25 in 2022, with a notable peak at 18.15 in 2020. The high ratio in 2020 could imply either strong investor confidence relative to sales or a period of elevated stock price not matched by sales performance. The downward trend post-2020 toward 6.25 suggests a reduced valuation multiple in relation to sales, possibly due to adjustments in market sentiment or changes in revenue growth dynamics.
- Price to Book Value (P/BV) Ratio
- The ratio decreased steadily from 16.53 in 2018 to 6.48 in 2022. This consistent decline indicates a diminishing market valuation relative to the company's book value. It may reflect a reassessment of asset quality, earnings prospects, or growth expectations by investors over the period. The halving of the ratio over five years suggests that the market became more conservative in pricing the company's net asset base.
Price to Earnings (P/E)
Align Technology Inc., historical P/E 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$) | ||||||
| Net income (in thousands) | 361,573) | 772,020) | 1,775,888) | 442,776) | 400,235) | |
| Earnings per share (EPS)2 | 4.72 | 9.80 | 22.44 | 5.62 | 5.00 | |
| Share price1, 3 | 304.64 | 512.56 | 567.11 | 218.35 | 258.97 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 64.55 | 52.31 | 25.27 | 38.84 | 51.76 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Abbott Laboratories | 26.76 | 29.13 | 48.49 | — | — | |
| Elevance Health Inc. | 19.20 | 18.13 | 15.87 | — | — | |
| Intuitive Surgical Inc. | 64.99 | 59.94 | 87.47 | — | — | |
| Medtronic PLC | 23.38 | 46.56 | 26.30 | — | — | |
| UnitedHealth Group Inc. | 22.46 | 26.03 | 20.54 | — | — | |
| P/E Ratio, Sector | ||||||
| Health Care Equipment & Services | 24.26 | 28.98 | 27.23 | — | — | |
| P/E Ratio, Industry | ||||||
| Health Care | 21.22 | 21.55 | 32.22 | — | — | |
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.
2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 361,573,000 ÷ 76,610,319 = 4.72
3 Closing price as at the filing date of Align Technology Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= 304.64 ÷ 4.72 = 64.55
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited significant volatility over the period from 2018 to 2022. Initially declining from $258.97 in 2018 to $218.35 in 2019, it then experienced a substantial increase, peaking at $567.11 in 2020. Following this peak, the price slightly decreased to $512.56 in 2021 and dropped more sharply to $304.64 in 2022. This pattern indicates a period of growth followed by correction or market reconsideration in the later years.
- Earnings per Share (EPS)
- The EPS showed considerable fluctuations. Starting at $5.00 in 2018, it marginally increased to $5.62 in 2019 before surging dramatically to $22.44 in 2020. Subsequently, EPS declined to $9.80 in 2021 and further dropped to $4.72 in 2022. This indicates that 2020 was an exceptional year in terms of profitability, which was not sustained in the following years, reflecting either a one-time event or changes affecting earnings quality or operational performance.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio displayed a complex trend. It decreased from 51.76 in 2018 to 38.84 in 2019, then dropped considerably to 25.27 in 2020, suggesting the market perceived the earnings increase as justified and possibly undervalued relative to price. However, the P/E ratio then increased sharply to 52.31 in 2021 and reached 64.55 in 2022, indicating heightened stock price relative to earnings in those years, potentially reflecting market optimism or expectations of future growth despite declining EPS.
Price to Operating Profit (P/OP)
Align Technology Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 76,610,319 | 78,795,494 | 79,132,723 | 78,753,161 | 79,989,347 | |
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | 642,595) | 976,400) | 387,171) | 542,493) | 466,564) | |
| Operating profit per share2 | 8.39 | 12.39 | 4.89 | 6.89 | 5.83 | |
| Share price1, 3 | 304.64 | 512.56 | 567.11 | 218.35 | 258.97 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 36.32 | 41.36 | 115.91 | 31.70 | 44.40 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Abbott Laboratories | 22.18 | 24.45 | 40.69 | — | — | |
| Elevance Health Inc. | 15.05 | 15.70 | 12.10 | — | — | |
| Intuitive Surgical Inc. | 54.49 | 56.11 | 88.37 | — | — | |
| Medtronic PLC | 20.48 | 37.44 | 26.29 | — | — | |
| UnitedHealth Group Inc. | 15.89 | 18.77 | 14.12 | — | — | |
| P/OP Ratio, Sector | ||||||
| Health Care Equipment & Services | 18.47 | 22.66 | 20.85 | — | — | |
| P/OP Ratio, Industry | ||||||
| Health Care | 16.58 | 18.20 | 24.21 | — | — | |
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.
2 2022 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 642,595,000 ÷ 76,610,319 = 8.39
3 Closing price as at the filing date of Align Technology Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 304.64 ÷ 8.39 = 36.32
5 Click competitor name to see calculations.
The share price exhibits significant volatility over the period analyzed. Initially, there is a decline from 258.97 US$ as of December 31, 2018, to 218.35 US$ by the end of 2019. This is followed by a sharp increase reaching a peak at 567.11 US$ on December 31, 2020. Subsequent years see a reduction, with the price falling to 512.56 US$ at the end of 2021 and further declining to 304.64 US$ by December 31, 2022.
Operating profit per share shows fluctuations as well. From 5.83 US$ in 2018, it rises moderately to 6.89 US$ in 2019. Thereafter, it dips to 4.89 US$ in 2020, before experiencing a significant increase to 12.39 US$ in 2021. The figure then declines to 8.39 US$ in 2022, though this remains above the levels recorded in 2018, 2019, and 2020.
The price-to-operating profit (P/OP) ratio demonstrates marked variability, reflecting the interplay between share price and operating profit per share. Beginning at a high level of 44.4 in 2018, it decreases to 31.7 in 2019, indicating improved valuation relative to earnings. In 2020, it spikes dramatically to 115.91, suggesting that share price outpaced operating profit considerably during that year. This ratio then declines to 41.36 in 2021 and further to 36.32 in 2022, pointing towards a partial reversion to more moderate valuation levels.
Overall, the data indicates periods of rapid growth in share price and operating profit per share, notably around 2020 and 2021, followed by a retreat in both metrics in 2022. The significant spike in the P/OP ratio in 2020 highlights a potential overvaluation at that point relative to operating profit. Despite subsequent decreases, the ratio remains higher than in 2019, suggesting ongoing market optimism relative to operating profitability, albeit at a more moderated level by the end of the period.
Price to Sales (P/S)
Align Technology Inc., historical P/S 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$) | ||||||
| Net revenues (in thousands) | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Sales per share2 | 48.75 | 50.16 | 31.24 | 30.56 | 24.58 | |
| Share price1, 3 | 304.64 | 512.56 | 567.11 | 218.35 | 258.97 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 6.25 | 10.22 | 18.15 | 7.14 | 10.53 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Abbott Laboratories | 4.25 | 4.78 | 6.30 | — | — | |
| Elevance Health Inc. | 0.74 | 0.81 | 0.60 | — | — | |
| Intuitive Surgical Inc. | 13.81 | 17.89 | 21.29 | — | — | |
| Medtronic PLC | 3.72 | 5.57 | 4.36 | — | — | |
| UnitedHealth Group Inc. | 1.40 | 1.58 | 1.24 | — | — | |
| P/S Ratio, Sector | ||||||
| Health Care Equipment & Services | 1.71 | 2.07 | 1.86 | — | — | |
| P/S Ratio, Industry | ||||||
| Health Care | 3.11 | 3.28 | 3.31 | — | — | |
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.
2 2022 Calculation
Sales per share = Net revenues ÷ No. shares of common stock outstanding
= 3,734,635,000 ÷ 76,610,319 = 48.75
3 Closing price as at the filing date of Align Technology Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= 304.64 ÷ 48.75 = 6.25
5 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends regarding the share price, sales per share, and price-to-sales (P/S) ratio.
- Share Price
- The share price experienced significant fluctuations. Initially, it declined from $258.97 in 2018 to $218.35 in 2019, representing a decrease. Subsequently, there was a sharp increase in 2020, with the share price peaking at $567.11. In 2021, the price slightly decreased to $512.56, followed by a substantial decline to $304.64 in 2022. Overall, the share price demonstrated high volatility, with a peak in 2020 and a downward trend thereafter.
- Sales per Share
- Sales per share showed a more consistent upward trajectory, growing each year from $24.58 in 2018 to $50.16 in 2021. There was a minor decline in 2022, with sales per share falling slightly to $48.75. Despite this small decrease, the overall trend in sales per share over the period is positive, indicating growth in the company’s revenue generation on a per-share basis.
- Price-to-Sales (P/S) Ratio
- The P/S ratio exhibited considerable volatility and an overall declining trend from 2018 through 2022. It started at 10.53 in 2018 and dropped significantly to 7.14 in 2019. The ratio then spiked sharply to 18.15 in 2020, corresponding with the peak in the share price. After 2020, the P/S ratio decreased markedly to 10.22 in 2021 and further to 6.25 in 2022, which is the lowest ratio in the observed period. This decline in the P/S ratio after 2020 indicates a reduction in market valuation relative to sales, possibly reflecting changing market sentiment or valuation adjustments.
In summary, while sales per share generally increased over the period, suggesting improved revenue performance, the share price and P/S ratio experienced significant volatility. The peak in share price and P/S ratio in 2020 was followed by a notable decline in subsequent years, signaling a possible revaluation of the company’s market position despite sustained sales growth. This divergence between sales growth and market valuation metrics warrants further investigation into underlying factors such as profitability, market conditions, or investor expectations.
Price to Book Value (P/BV)
Align Technology Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 76,610,319 | 78,795,494 | 79,132,723 | 78,753,161 | 79,989,347 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 3,601,358) | 3,622,714) | 3,233,865) | 1,346,169) | 1,252,891) | |
| Book value per share (BVPS)2 | 47.01 | 45.98 | 40.87 | 17.09 | 15.66 | |
| Share price1, 3 | 304.64 | 512.56 | 567.11 | 218.35 | 258.97 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 6.48 | 11.15 | 13.88 | 12.77 | 16.53 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Abbott Laboratories | 5.06 | 5.75 | 6.65 | — | — | |
| Elevance Health Inc. | 3.19 | 3.07 | 2.19 | — | — | |
| Intuitive Surgical Inc. | 7.78 | 8.59 | 9.53 | — | — | |
| Medtronic PLC | 2.24 | 3.26 | 2.48 | — | — | |
| UnitedHealth Group Inc. | 5.81 | 6.27 | 4.83 | — | — | |
| P/BV Ratio, Sector | ||||||
| Health Care Equipment & Services | 4.46 | 5.01 | 4.30 | — | — | |
| P/BV Ratio, Industry | ||||||
| Health Care | 5.26 | 5.48 | 5.37 | — | — | |
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.
2 2022 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 3,601,358,000 ÷ 76,610,319 = 47.01
3 Closing price as at the filing date of Align Technology Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= 304.64 ÷ 47.01 = 6.48
5 Click competitor name to see calculations.
The financial data exhibits several notable trends over the period from 2018 to 2022. The share price experienced significant fluctuations, starting at $258.97 in 2018, decreasing to $218.35 in 2019, then sharply increasing to a peak of $567.11 in 2020. Following this peak, the share price declined to $512.56 in 2021 and further reduced to $304.64 in 2022.
Book value per share (BVPS) showed a consistent upward trajectory throughout the period. It increased steadily from $15.66 in 2018 to $17.09 in 2019, then nearly doubled to $40.87 in 2020. This growth continued, reaching $45.98 in 2021 and slightly rising further to $47.01 in 2022.
The price-to-book value (P/BV) ratio trends reflect the interaction between share price volatility and the steady rise in book value per share. The P/BV ratio declined from a high of 16.53 in 2018 to 12.77 in 2019, then slightly increased to 13.88 in 2020 despite the sharp rise in share price, likely due to the substantial increase in BVPS. In 2021, the P/BV ratio decreased to 11.15, and more significantly declined to 6.48 by 2022. This suggests that the stock became less overvalued relative to its book value over time, indicating an adjustment in market valuation closer to underlying book values.
Overall, the data indicates that while the company's intrinsic book value per share was strengthening consistently, market prices underwent considerable volatility with a notable peak in 2020, followed by a retreat in subsequent years. The decreasing P/BV ratio in recent years points to a normalization of market valuation relative to the company’s net asset value.