Align Tech (ALGN) AI Stock Analysis

• Market Cap: $12.56B
• Dividend Yield: N/A
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 27.6
• Beta (1Y): 1.38
• Revenue Growth: 0.56%
• EPS Growth: -12.05%
• Country: US
• Employees: 21,200
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 3.29
• Shares Outstanding: 71,282,135
• 10 Day Avg. Volume: 1,521,903
• 30 Day Avg. Volume: 1,457,076
• PEG Ratio: 51.80
• Price to Book (P/B): 2.80
• Price to Sales (P/S): 2.81
• P/FCF Ratio: 23.08
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 2.90
• Enterprise Value/Gross Profit: 4.30
• Enterprise Value/Ebitda: 14.45
• 1Y Price Target: $201.70
• Price Target Upside: 14.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 11.31
• Revenue Forecast (FY): $4.19B

• Rating: 76 Outperform
• Price Target: $195.00 ▲(10.64% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is driven primarily by strong financial quality (notably the low-leverage balance sheet and solid margins) and a generally positive earnings outlook with expected margin improvement. Technicals are supportive but somewhat overextended, while valuation remains a headwind due to a high P/E.

Positive Factors

Conservative balance sheet

Very low leverage and a sizable equity base provide durable financial flexibility: supports capital spending, buybacks, and strategic investment without stressing liquidity. This downside protection reduces bankruptcy risk and preserves ability to execute through industry cycles over the next 2–6 months and beyond.

Strong gross margins

High gross margins indicate robust unit economics for Invisalign and digital services, creating a sustainable profit buffer versus price pressure. Strong underlying margins help fund R&D, marketing, and systems scale while enabling faster margin recovery if ASPs stabilize, supporting longer-term profitability.

Resilient DSO/channel partnerships

Deep relationships with fast-growing DSOs create a recurring, high-utilization distribution channel that diversifies revenue away from retail softness. Strong DSO retention and volume growth support predictable case starts and stickier demand, reinforcing durable top-line stability and adoption over coming quarters.

Negative Factors

GAAP gross margin pressure

A near-5ppt GAAP gross margin decline signals structural headwinds from lower ASPs and higher non-cash costs; persistent margin erosion would reduce free cash flow and constrain reinvestment. If these pressures continue, they could compress profitability and slow margin-driven recovery over multiple quarters.

Margin dilution from direct fabrication

Shifting to direct 3D printing is a strategic move but carries near-term dilution and execution risk as scale and yield improve. The program will likely absorb capital and operational focus in 2026, delaying margin accretion until scale is achieved (company expects accretion in later years).

China VBP regulatory uncertainty

Unclear timing and scope of China's volume-based procurement introduces regulatory and pricing risk in a significant market. Potential pricing changes or procurement mandates could materially affect revenue and mix where private channels dominate, creating planning and margin uncertainty over the medium term.

Align Tech Business Overview & Revenue Model

Company Description

Align Technology, Inc., a medical device company, designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontists and general practitioner dentists, and restorative and aesthetic dentistry. It operates in two segments, Clear Aligner; and Scanners and Services. The Clear Aligner segment consists of comprehensive products, including Invisalign comprehensive treatment that addresses the orthodontic needs of teenage patients, such as mandibular advancement, compliance indicators, and compensation for tooth eruption; and Invisalign First Phase I and Invisalign First Comprehensive Phase 2 package for younger patients generally between the ages of seven and ten years, which is a mixture of primary/baby and permanent teeth. This segment's non-comprehensive products comprise Invisalign moderate, lite and express packages, and Invisalign go; and non-case products include retention products, Invisalign training fees, and sales of ancillary products, such as cleaning material, and adjusting tools used by dental professionals during the course of treatment. The Scanners and Services segment offers iTero scanner, a single hardware platform with software options for restorative or orthodontic procedures; restorative software for general practitioner dentists, prosthodontists, periodontists, and oral surgeons; and software for orthodontists for digital records storage, orthodontic diagnosis, and for the fabrication of printed models and retainers. This segment also provides computer-aided design and computer-aided manufacturing services; ancillary products, such as disposable sleeves for the wand; iTero model and dies; third party scanners and digital scans; Invisalign outcome simulator, a chair-side and cloud-based application for the iTero scanner; Invisalign progress assessment tool; and TimeLapse technology, which allows doctors or practitioners to compare a patient's historic 3D scans to the present-day scan. The company sells its products in the United States, Switzerland, China, and internationally. Align Technology, Inc. was incorporated in 1997 and is headquartered in Tempe, Arizona.

How the Company Makes Money

Align Technology primarily generates revenue by selling products and services used by dentists and orthodontists to diagnose, plan, and deliver orthodontic treatment and digital restorative care. Its revenue is largely organized into two main segments: 1) Clear Aligner segment (Invisalign) - System and case-based sales: Align earns revenue when dental professionals submit a patient case for Invisalign treatment. The company charges for the manufacture and delivery of a series of custom clear aligners and related items (e.g., treatment-associated components) tied to that case. - Doctor utilization drives volume: Revenue is influenced by the number of trained/active Invisalign providers, case submissions per provider, and the mix of treatment products offered. - Pricing and product mix: Average revenue per case can vary based on the specific Invisalign product type and treatment complexity, as well as geography and channel structure. 2) Imaging Systems and CAD/CAM Services segment (iTero and digital services) - Hardware sales: Align sells iTero intraoral scanners and associated accessories to dental practices, generating upfront equipment revenue. - Recurring and usage-based revenue: The company also earns ongoing revenue from software features, service/support arrangements, and digital workflow services that are tied to scanner usage and practice subscriptions (where applicable), supporting continued engagement after the initial hardware sale. Additional factors contributing to earnings - Digital workflow ecosystem effects: Adoption of iTero scanners can support Invisalign case starts by streamlining scanning and treatment planning, while Invisalign demand can encourage scanner adoption—reinforcing both major revenue streams. - Dental professional relationships and training: Align invests in training, clinical education, and practice support to expand its provider base and increase utilization. Significant partnerships: null

Align Tech Financial Statement Overview

Summary

Strong overall fundamentals supported by a very conservative balance sheet (very low leverage and sizable equity) and solid gross margins. Recent results show revenue re-acceleration and improved free-cash-flow conversion, but profitability is below prior peaks and cash flow has been historically volatile.

Income Statement

Revenue has been resilient with a strong rebound year in 2025 (annual revenue growth of 131%), but profitability has softened versus the 2021 peak: net margin is ~10% in 2025 versus ~20% in 2021. Gross margins remain strong (high-60% to low-70% range), supporting good underlying unit economics, but operating profitability looks less consistent (including an apparent 2025 EBIT margin data inconsistency vs positive EBIT/EBITDA). Overall: solid margin profile and recovery in growth, but weaker bottom-line efficiency vs prior highs and some volatility year-to-year.

Balance Sheet

The balance sheet is a clear strength: leverage is very low (debt-to-equity ~2% in 2025) and equity is sizable (~$4.0B), providing flexibility and downside protection. Returns on equity are healthy (~10% in 2025) though down meaningfully from prior peak levels, reflecting reduced profitability rather than balance-sheet strain. Overall: conservatively financed with strong capital base; the main watch item is ROE compression versus earlier years.

Cash Flow

Cash generation is generally healthy: operating cash flow was ~$593M in 2025 and free cash flow matched operating cash flow, with free cash flow running at about 100% of net income in 2025 (improved quality of earnings vs earlier years). However, cash flow has been choppy historically (notably weaker free cash flow in 2022), and cash conversion as shown by operating cash flow relative to revenue remains moderate (~31% in 2025). Overall: good recent conversion and rebound, but a track record of variability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.03B	4.00B	3.86B	3.73B	3.95B
Gross Profit	2.76B	2.80B	2.71B	2.63B	2.94B
EBITDA	765.87M	816.80M	799.05M	779.84M	1.09B
Net Income	410.35M	421.36M	445.05M	361.57M	772.02M
Balance Sheet
Total Assets	6.23B	6.21B	6.08B	5.95B	5.94B
Cash, Cash Equivalents and Short-Term Investments	1.09B	1.04B	972.74M	999.58M	1.17B
Total Debt	114.45M	119.28M	126.62M	126.91M	125.38M
Total Liabilities	2.18B	2.36B	2.45B	2.35B	2.32B
Stockholders Equity	4.05B	3.85B	3.63B	3.60B	3.62B
Cash Flow
Free Cash Flow	490.78M	622.65M	608.06M	276.83M	771.45M
Operating Cash Flow	593.22M	738.23M	785.78M	568.73M	1.17B
Investing Cash Flow	-112.44M	-254.91M	-195.94M	-213.32M	-563.43M
Financing Cash Flow	-464.58M	-355.72M	-598.34M	-501.69M	-458.33M

Align Tech Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 176.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGN, the sentiment is Positive. The current price of 176.25 is below the 20-day moving average (MA) of 178.61, above the 50-day MA of 176.13, and above the 200-day MA of 159.81, indicating a neutral trend. The MACD of -1.84 indicates Positive momentum. The RSI at 49.95 is Neutral, neither overbought nor oversold. The STOCH value of 71.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALGN.

Align Tech Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GMED	80 Outperform	$11.66B	21.94	10.01%	―	11.75%	364.73%
ALGN	76 Outperform	$12.56B	27.60	10.45%	―	0.56%	-12.05%
SNN	72 Outperform	$13.73B	22.70	11.79%	2.28%	5.78%	61.52%
UFPT	69 Neutral	$1.52B	25.04	17.36%	―	29.47%	23.24%
ZBH	65 Neutral	$17.58B	31.78	5.60%	1.05%	5.47%	-23.03%
GKOS	59 Neutral	$5.93B	-34.40	-25.41%	―	30.38%	47.64%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Align Tech Corporate Events

Align Tech Updates Bylaws to Enable Shareholder Meetings

On February 24, 2026, Align Technology, Inc.’s Board of Directors approved and implemented Amended and Restated Bylaws that took effect the same day. The changes include a new provision allowing one or more shareholders who have continuously held at least 25% of the company’s outstanding common stock for at least one year, and who meet specified informational and timing requirements, to compel the Board to call a special shareholders’ meeting.

The revised bylaws also incorporate clarifying, conforming, technical, and ministerial updates, signaling a formalization and tightening of the company’s governance framework. This move may enhance large shareholders’ ability to influence corporate decisions between annual meetings while preserving structured procedures around how such special meetings can be requested and convened.

The most recent analyst rating on (ALGN) stock is a Hold with a $200.00 price target. To see the full list of analyst forecasts on Align Tech stock, see the ALGN Stock Forecast page.