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Align Tech (ALGN)
NASDAQ:ALGN
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Align Tech (ALGN) AI Stock Analysis

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ALGN

Align Tech

(NASDAQ:ALGN)

Rating:63Neutral
Price Target:
$154.00
▲(14.33% Upside)
Align Tech's overall stock score is driven by its strong financial performance and strategic stock repurchase plan, which are offset by weak technical indicators and a mixed earnings outlook. The company's moderate valuation and restructuring plans also contribute to a cautious investment stance.
Positive Factors
Financial Performance
The fundamentals of the company remain strong and guidance seems achievable.
Strategic Initiatives
The company expects a meaningful step-up in the fourth quarter, in part aided by Lumina upgrades and U.K. VAT benefits.
Valuation
With shares at 13 times 2026 earnings, the recommendation remains Outperform given a favorable risk/reward profile.
Negative Factors
Earnings
The company's shares fell significantly after a shortfall in 2Q results with lower teen and adult volume and reduced revenue guidance.
Macroeconomic Factors
The biggest risk to the stock remains macroeconomic factors, which could worsen in the second half of the year.
Market Conditions
A global tariff war and a regressive tax bill were not as supportive of the company's growth as originally thought.

Align Tech (ALGN) vs. SPDR S&P 500 ETF (SPY)

Align Tech Business Overview & Revenue Model

Company DescriptionAlign Technology, Inc. is a global medical device company that specializes in the design, manufacture, and marketing of innovative products in the orthodontics and dentistry sectors. The company is best known for its Invisalign clear aligner system, which offers a discreet alternative to traditional metal braces for teeth straightening. In addition to Invisalign, Align Tech also provides the iTero intraoral scanner and other digital tools that facilitate dental treatment planning and patient engagement, thereby enhancing the overall orthodontic experience.
How the Company Makes MoneyAlign Technology generates revenue primarily through the sale of its Invisalign products and services, which include the clear aligners and associated treatment tools. The company earns significant income from orthodontic and dental professionals who purchase these products for their patients. Another key revenue stream comes from the iTero intraoral scanners, which are sold to dental practices to aid in the treatment process. Align also benefits from partnerships with dental professionals and practices, enabling it to expand its market reach and drive sales. Additionally, the company invests in research and development to innovate and maintain competitive advantage in the rapidly evolving dental technology market, which further contributes to its revenue generation.

Align Tech Key Performance Indicators (KPIs)

Any
Any
Gross Profit by Segment
Gross Profit by Segment
Reveals the profitability of each business segment, indicating which areas contribute most to the bottom line and where cost management might be needed.
Chart InsightsAlign Tech's gross profit from Clear Aligners shows a volatile trend with recent declines, reflecting challenges highlighted in the earnings call. Economic uncertainties and increased competition have pressured revenues, particularly in North America and Europe. Meanwhile, Imaging Systems and CAD CAM services have seen robust growth, driven by iTero Lumina upgrades. Align's strategic focus on cost-reduction and operational realignment aims to mitigate these challenges, but macroeconomic headwinds and a cautious outlook on clear aligner demand suggest potential volatility ahead.
Data provided by:Main Street Data

Align Tech Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Negative
The earnings call presented a mixed outlook with some strong areas of growth in specific segments and regions. However, the overall performance was overshadowed by significant challenges, particularly in North America and Europe, and a decline in revenue. The company faces ongoing macroeconomic uncertainties and plans restructuring actions to address these challenges.
Q2-2025 Updates
Positive Updates
Record Number of Doctors
Achieved a record number of doctors shipped to for the second quarter, demonstrating strong engagement with the professional community.
Systems and Services Segment Growth
Q2 '25 revenues for Systems and Services were $207.8 million, an increase of 13.9% sequentially and 5.6% year-over-year, primarily driven by iTero Lumina wand upgrades.
Invisalign First Growth
Invisalign First was a key year-over-year growth driver across all regions, reflecting rising demand for early intervention solutions.
Strong APAC Region Performance
Q2 clear aligner volume grew year-over-year in APAC, with increased submitters across orthodontists and GP channels, particularly driven by China.
Record Milestone for Teen Treatments
Surpassed a significant milestone of over 6 million teens and kids treated with the Invisalign system globally.
Negative Updates
Revenue Decline
Total revenues for Q2 were $1,012.4 million, down 1.6% year-over-year, with clear aligner revenues down 3.3% year-over-year.
Lower-than-Expected Case Conversions
Uneven patient case conversion led to a lower than typical seasonal uptick in case starts, particularly impacting June.
Challenges in North America and Europe
Lower-than-expected clear aligner volumes in North America and certain European countries, notably France and Germany.
Continued Economic Uncertainty
Ongoing economic uncertainties, including U.S. tariff turmoil and less affordable financing options, impacted demand for clear aligners.
Restructuring and Workforce Reduction
Align plans to take actions to realign certain business groups and reduce its global workforce, incurring onetime charges of approximately $150 million to $170 million in the second half of 2025.
Company Guidance
In the second quarter of 2025, Align Technology reported mixed financial results, with total Q2 revenues at $1.012 billion, reflecting a sequential increase of 3.4% but a year-over-year decline of 1.6%. Revenues from the Systems and Services segment rose 13.9% sequentially and 5.6% year-over-year, driven by the iTero Lumina wand upgrades, although sales of full iTero Lumina Systems were lower than expected. Clear aligner revenues, at $804.6 million, increased 1% sequentially, primarily due to favorable foreign exchange, but decreased 3.3% year-over-year, impacted by lower ASPs and product mix shifts. The operating margin stood at 16.1%, a 2.7-point increase sequentially, yet a 1.7-point increase year-over-year. Align anticipates further economic uncertainties and plans restructuring actions, expecting onetime charges of $150 million to $170 million in the second half of 2025, with a projected GAAP operating margin of 13% to 14% for the fiscal year. The company aims for a 5% to 15% revenue growth over the long term, despite the current challenges.

Align Tech Financial Statement Overview

Summary
Align Tech maintains a strong financial position with robust profitability, stable revenue streams, and efficient cash flow management. The company's low leverage and effective equity utilization enhance its financial stability, while continued focus on operational efficiency supports its cash generation capacity.
Income Statement
75
Positive
Align Tech shows a consistent revenue stream with TTM revenue at $3.96 billion, though a slight decline from the previous year. Gross profit margin remains strong at approximately 69.8%, while the net profit margin is 11%. Despite a small drop in revenue, the company's profitability remains solid with stable EBIT and EBITDA margins.
Balance Sheet
80
Positive
The balance sheet is healthy with a low debt-to-equity ratio of 0.02, indicating minimal leverage. The equity ratio stands robustly at 62.9%, demonstrating strong financial stability. Return on equity is reasonable at 11.2%, reflecting effective use of equity.
Cash Flow
78
Positive
Align Tech exhibits solid cash flow management with a free cash flow of $678 million in the TTM, showing growth over previous periods. Operating cash flow to net income ratio is strong at 1.67, suggesting efficient earnings conversion to cash. The ratio of free cash flow to net income stands at 1.55, indicating healthy cash generation relative to profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.96B4.00B3.86B3.73B3.95B2.47B
Gross Profit2.77B2.80B2.71B2.63B2.94B1.76B
EBITDA763.32M816.80M799.05M779.84M1.09B480.71M
Net Income437.61M421.36M445.05M361.57M772.02M1.78B
Balance Sheet
Total Assets6.22B6.21B6.08B5.95B5.94B4.83B
Cash, Cash Equivalents and Short-Term Investments901.16M1.04B972.74M999.58M1.17B960.84M
Total Debt123.02M119.28M126.62M126.91M125.38M86.18M
Total Liabilities2.31B2.36B2.45B2.35B2.32B1.60B
Stockholders Equity3.91B3.85B3.63B3.60B3.62B3.23B
Cash Flow
Free Cash Flow678.30M622.65M608.06M276.83M771.45M507.26M
Operating Cash Flow731.07M738.23M785.78M568.73M1.17B662.17M
Investing Cash Flow-119.60M-254.91M-195.94M-213.32M-563.43M-231.51M
Financing Cash Flow-495.50M-355.72M-598.34M-501.69M-458.33M-30.81M

Align Tech Technical Analysis

Technical Analysis Sentiment
Negative
Last Price134.70
Price Trends
50DMA
168.35
Negative
100DMA
173.65
Negative
200DMA
188.05
Negative
Market Momentum
MACD
-8.07
Negative
RSI
35.77
Neutral
STOCH
13.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGN, the sentiment is Negative. The current price of 134.7 is below the 20-day moving average (MA) of 141.18, below the 50-day MA of 168.35, and below the 200-day MA of 188.05, indicating a bearish trend. The MACD of -8.07 indicates Negative momentum. The RSI at 35.77 is Neutral, neither overbought nor oversold. The STOCH value of 13.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALGN.

Align Tech Risk Analysis

Align Tech disclosed 33 risk factors in its most recent earnings report. Align Tech reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Align Tech Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$20.80B25.576.52%0.92%4.11%-14.43%
78
Outperform
$16.10B32.649.20%1.99%5.78%61.52%
78
Outperform
$8.09B22.698.62%17.43%775.48%
73
Outperform
$1.61B24.2119.29%40.98%34.80%
63
Neutral
$9.94B22.3311.41%0.56%0.43%
53
Neutral
$5.39B-12.98%26.70%48.19%
51
Neutral
$7.91B-0.36-41.71%2.23%23.45%-1.86%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALGN
Align Tech
134.70
-86.45
-39.09%
SNN
Smith & Nephew Snats
37.64
6.94
22.61%
UFPT
Ufp Technologies
208.85
-112.39
-34.99%
ZBH
Zimmer Biomet Holdings
104.76
0.91
0.88%
GMED
Globus Medical
60.29
-9.70
-13.86%
GKOS
Glaukos
90.14
-39.14
-30.28%

Align Tech Corporate Events

Stock BuybackBusiness Operations and Strategy
Align Tech Announces $200 Million Stock Repurchase Plan
Positive
Aug 5, 2025

On August 5, 2025, Align Technology announced its plan to repurchase $200 million of its common stock through open market transactions as part of its $1.0 billion stock repurchase program approved in April 2025. This move reflects the company’s confidence in its long-term strategy and market opportunities, aiming to enhance stockholder value despite challenging macroeconomic conditions. The repurchase will be funded with cash on hand and is expected to be completed by January 2026.

Shareholder MeetingsBusiness Operations and Strategy
Align Tech Approves Key Proposals at Annual Meeting
Neutral
May 21, 2025

On May 21, 2025, Align Technology, Inc. held its 2025 Annual Meeting of Stockholders, where several key proposals were approved. These included an amendment to the 2005 Incentive Plan to increase authorized shares, and the replacement of supermajority provisions with simple majority vote requirements in the company’s Certificate of Incorporation. The meeting also ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions are expected to impact Align Technology’s governance structure and operational flexibility, potentially influencing shareholder engagement and corporate strategy.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025