Align Technology Inc (ALGN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 70.00% | 70.08% | 70.52% | 74.26% | 71.33% |
| Operating profit margin | 15.19% | 16.66% | 17.21% | 24.70% | 11.88% |
| Pretax margin | 15.23% | 16.60% | 16.04% | 25.61% | 15.33% |
| Net profit margin | 10.54% | 11.52% | 9.68% | 19.53% | 71.84% |
Align Technology Inc's profitability ratios have shown fluctuations over the past five years.
- The gross profit margin improved from 71.33% in 2020 to 74.26% in 2021 but then decreased to 70.00% by the end of 2024. This indicates the company's efficiency in controlling the cost of goods sold.
- The operating profit margin more than doubled from 11.88% in 2020 to 24.70% in 2021, suggesting improved operational efficiency. However, it declined to 15.19% by the end of 2024, which may indicate increased operating expenses impacting profitability.
- The pretax margin followed a similar trend, increasing significantly from 15.33% in 2020 to 25.61% in 2021, then decreasing to 15.23% in 2024. This indicates fluctuations in the company's ability to generate profits before taxes.
- The net profit margin also saw a significant decrease from 71.84% in 2020 to 10.54% in 2024. This suggests that after taking into account all expenses, the company's bottom line profitability has reduced significantly over the years.
Overall, Align Technology Inc's profitability ratios show a mixed performance over the years, with improvements in certain areas but declines in others. It may be important for the company to maintain a balance between increasing revenues and controlling costs to ensure sustained profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.78% | 10.57% | 10.80% | 16.43% | 6.08% |
| Return on assets (ROA) | 6.78% | 7.32% | 6.08% | 12.99% | 36.77% |
| Return on total capital | 17.44% | 17.72% | 16.63% | 26.95% | 8.39% |
| Return on equity (ROE) | 10.94% | 12.26% | 10.04% | 21.31% | 54.92% |
Align Technology Inc's profitability ratios show fluctuations over the years. The Operating return on assets (Operating ROA) improved from 6.08% in 2020 to a peak of 16.43% in 2021 before declining slightly to 10.57% in 2023. However, it remained relatively stable at 10.80% in 2022 and 9.78% in 2024.
The Return on assets (ROA) saw a significant decrease from 36.77% in 2020 to 6.08% in 2022, indicating a decline in the company's ability to generate profits from its assets. The ratio then increased to 7.32% in 2023 and 6.78% in 2024, portraying a recovery in asset utilization efficiency.
Return on total capital exhibited a positive trend, rising from 8.39% in 2020 to 26.95% in 2021, before stabilizing around the mid-teens range in subsequent years, with values of 16.63% in 2022, 17.72% in 2023, and 17.44% in 2024.
Return on equity (ROE) followed a similar pattern to ROA, with a sharp decline from 54.92% in 2020 to 10.04% in 2022, recovering slightly to 12.26% in 2023 and remaining at 10.94% in 2024. This indicates fluctuations in the profitability attributed to shareholders' equity over the years.
Overall, while some ratios fluctuated, Align Technology Inc maintained a favorable level of profitability as seen in its Operating ROA and Return on total capital, despite temporary declines in ROA and ROE during the period under consideration.