Align Technology Inc (ALGN)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	421,362	445,053	361,573	772,020	1,775,890
Total stockholders’ equity	US$ in thousands	3,851,980	3,630,490	3,601,360	3,622,710	3,233,860
ROE		10.94%	12.26%	10.04%	21.31%	54.92%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $421,362K ÷ $3,851,980K
= 10.94%

Align Technology Inc's return on equity (ROE) has exhibited a declining trend over the last five years. As of December 31, 2020, the ROE stood at a robust 54.92%, indicating a strong ability to generate profit from shareholders' equity. However, there was a considerable decrease in ROE by the end of 2021 to 21.31%, which suggests a lower profitability relative to equity.

The downward trend continued into 2022, with the ROE falling to 10.04%, indicating a significant drop in the company's profit generation efficiency. In 2023, there was a slight improvement in ROE to 12.26%, but it remained relatively low compared to previous years. By December 31, 2024, the ROE further decreased to 10.94%, continuing the trend of declining profitability relative to shareholders' equity.

Overall, the decreasing trend in Align Technology Inc's ROE over the last five years raises concerns about the company's ability to generate returns for shareholders from their investments in the business. It is essential for the company to closely monitor and address the factors impacting its profitability to improve its ROE in the future.