Align Technology (NASDAQ:ALGN) stock reached an all-time high three weeks ago. And two weeks ago. And last week. Now, the stock has hit yet another all-time high. 

Some might note that several of Align's key patents expired last year, and wonder if the bubble is about to burst. Others, like Morgan Stanley analyst Steve Beuchaw, think Align has simply become too expensive. Beuchaw downgraded the stock from overweight to equal-weight in April. Since his downgrade, Align's share price has jumped more than 30%.

Is Align Technology still a buy, or are the doubters right to question how much higher the stock can go? There are three key points I think investors should consider.

Ascending wooden blocks with a line drawn above them pointed upwards and 2018 written below them

Image source: Getty Images.

1. The company is continually innovating 

In 2017, Align spent $97 million on research and development, up 29% from the previous year. Based on the company's first-quarter results, Align should bump its R&D spending up by 22% or more in 2018. Why is the company's continual innovation important?

Most importantly, Align's R&D holds the potential to dramatically expand its total addressable market. The company's Invisalign clear aligners are currently only applicable for around 70% of cases of malocclusion (misalignment of teeth). Align should be able to improve its aligner technology to capture a significantly larger portion of this market over the next few years.  

Innovations also should help Align fend off potential competition. While it's true that some of the U.S. patents for Invisalign expired in 2017, and some international patents expire this year, as of Dec. 31, 2017, Align still had 420 active U.S. patents and 456 active international patents. Thanks to its continued focus on R&D, the company also claims 416 pending patents across the world.

2. People all over the world want great smiles

More than half of Align's total revenue in the first quarter came from the U.S., but there are many more people all over the world who want great smiles. Align has a tremendous opportunity to grow in international markets.

The company's goal is to increase the percentage of total revenue stemming from European, Middle Eastern, and African markets to more than 30% by 2021. Align is already seeing rapid sales growth for Invisalign in several European countries. 

The Asia Pacific region presents another huge market opportunity for Align. China is currently the company's No. 2 global market behind the U.S. Align CEO Joe Hogan recently told Bloomberg that Japan will become the next Asian country in the company's top five markets by 2023. Hogan projected annual sales growth for the company in Japan of between 25% and 35%. 

3. Don't forget Align's "other" business

Invisalign is and will continue to be Align's flagship product. However, it's important not to overlook the company's other fast-growing business: iTero intra-oral scanners.

In the first quarter, Align's scanners business contributed nearly 12% of total revenue. Joe Hogan thinks scanners could make up between 20% and 30% of total revenue in the future, with sales growing at a faster rate than the anticipated tremendous growth for Invisalign.

Good news for the iTero scanner business, though, is also good news for Invisalign. Align's research found that dental practitioners who use iTero scanners significantly boost the number of Invisalign cases that patients accept. 

A premium valuation, but still a buy

Align Technology's valuation is already so steep that it might be hard to imagine the stock being able to go much higher. Shares currently trade at a whopping 57 times expected earnings. Could this lofty valuation limit Align's momentum? Maybe. However, the stock has traded at even higher earnings multiples in the past and still generated gains.

My view is that Align should benefit from continued adoption of its clear aligners as well as increased sales of its scanners. Even after its impressive growth over the last few years, Align still only claims 12% of its current addressable market and less than 5% of the teen market. I think Align will increase its market share and expand the total market by launching new products. I think Align stock is still a buy.

Keith Speights owns shares of Align Technology. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.