{"id":66403,"date":"2023-09-28T10:26:55","date_gmt":"2023-09-28T14:26:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/will-align-technology-algn-stock-rebound-to-its-pre-inflation-shock-level-of-over-700\/"},"modified":"2023-09-28T10:26:57","modified_gmt":"2023-09-28T14:26:57","slug":"will-align-technology-algn-stock-rebound-to-its-pre-inflation-shock-level-of-over-700","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=66403","title":{"rendered":"Will Align Technology (ALGN) Stock Rebound To Its Pre-Inflation Shock Level Of Over $700?"},"content":{"rendered":"
\n

Align Technology stock<\/strong> (NASDAQ
\n NDAQ
\n <\/fbs-ticker>: ALGN), best known for its Invisalign dental aligners, currently trades at $300 per share, 45% below the level seen in March 2021, and it looks undervalued. ALGN stock was trading at around $237 in early June 2022, just before the Fed started increasing rates, and is now 26% above that level, compared to 13% gains for the S&P 500 during this period. The rally in the stock over recent months has been driven by a steady decline in the inflation rate in response to the Fed\u2019s aggressive rate hike plan \u2013 although investors still have concerns about a potential recession.<\/p>\n

Interestingly, ALGN stock has had a Sharpe Ratio of 0.5<\/strong> since early 2017, slightly lower than 0.6<\/strong> for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3<\/strong> for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.<\/p>\n

Returning to the pre-inflation shock level of $730 (seen in Sep 2021) means that ALGN stock will have to gain more than 140% from here, and we don\u2019t think this will materialize anytime soon. That said, ALGN stock trades at 6x revenues compared to its last five-year average of 13x, implying that the stock is way below its historical valuation multiple average. The company now faces increased competition from the likes of SmileDirectClub, among others. This may result in revenue growth slowing in the coming years, and, as such, a decline in its P\/S multiple makes sense. However, the gap between the current and historical average looks steep, and we believe that investors can use this dip to buy ALGN for solid long-term gains.<\/p>\n

Our detailed analysis of Align Technology\u2019s upside post-inflation shock<\/strong> captures trends in the company\u2019s stock during the turbulent market conditions seen over 2022. It compares these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n

<\/fbs-ad><\/p>\n

2022 Inflation Shock<\/strong><\/p>\n

Timeline of Inflation Shock So Far:<\/p>\n