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Align Tech (ALGN)
NASDAQ:ALGN

Align Tech (ALGN) AI Stock Analysis

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Align Tech

(NASDAQ:ALGN)

Rating:73Outperform
Price Target:
$201.00
▲(11.28%Upside)
Align Tech scores a 73, driven primarily by its strong financial performance and strategic initiatives like the stock buyback program. While technical analysis and valuation present moderate concerns, the company's robust balance sheet and positive earnings guidance provide a solid foundation for future growth.
Positive Factors
Geographic Expansion
The company is expanding into new geographies in the EMEA area and deepening penetration in established markets.
Innovation and Technology
Align Technology focuses on technology and innovation, maintaining an edge in workflow and treatment outcomes ahead of competition.
Stock Repurchase Program
The company authorized a new $1Bn share repurchase program after completing its previous $1Bn program.
Negative Factors
Direct Fabrication Impact
Direct fabrication is expected to be a headwind initially, impacting financial performance in the short term before becoming a positive factor in later years.
Growth Headwinds
ASPs will be a growth headwind, especially as mix continues to shift.
Revenue Growth Adjustment
Align Technology's medium-term revenue growth target was adjusted to a more modest range, reflecting a step back from previously ambitious goals.

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

Align Tech Business Overview & Revenue Model

Company DescriptionAlign Technology, Inc. (ALGN) is a global medical device company that specializes in the design, manufacture, and marketing of Invisalign clear aligners, iTero intraoral scanners, and exocad CAD/CAM software for digital orthodontics and restorative dentistry. The company operates primarily in the healthcare sector, focusing on products and technologies that improve dental and orthodontic treatment outcomes. Align Technology's core product, Invisalign, is a popular alternative to traditional metal braces, offering a clear and removable solution for teeth straightening.
How the Company Makes MoneyAlign Technology generates revenue primarily through the sales of its Invisalign clear aligners and iTero intraoral scanners. The Invisalign product line is the most significant revenue driver, appealing to both consumers and dental professionals seeking a less invasive and more aesthetically pleasing orthodontic treatment. Revenue from Invisalign is based on the volume of case shipments to orthodontists and general practitioners. The iTero scanners, used for creating digital impressions of patients' teeth, complement the Invisalign system and contribute to revenue through sales and service fees. Align Technology also earns revenue from its exocad CAD/CAM software, which aids in dental restoration workflows. The company benefits from strategic partnerships with dental professionals and clinics worldwide, enhancing its market reach and adoption of its solutions.

Align Tech Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 4.22%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong growth in Clear Aligner volumes and successful product launches, but was offset by challenges such as sequential revenue decline in Systems and Services, unfavorable foreign exchange impacts, and lower operating margins.
Q1-2025 Updates
Positive Updates
Record Growth in Clear Aligner Volumes
Q1 2025 Clear Aligner volumes grew 6.2% year-over-year, driven by strength across EMEA, APAC regions, and North America. This marks the highest year-over-year growth rate for both adult and teen patients since 2021.
Expansion in Teen and Kids Segment
Approximately 226,000 teens and kids started treatment with Invisalign Clear Aligners in Q1 2025, an increase of 4.5% sequentially and 13.3% year-over-year.
iTero Lumina Scanner Launch
Successful launch of iTero Lumina with restorative software, contributing to year-over-year growth in Systems and Services revenues.
Global Reach with New Products
Invisalign Palate Expander system expanded to several new markets including Turkey and China. Invisalign system with Mandibular Advancement featuring Occlusal Blocks launched in the U.S., Canada, Australia, and New Zealand.
Negative Updates
Sequential Decline in Systems and Services Revenue
Q1 2025 Systems and Services revenues were down 9.2% sequentially due to lower scanner systems revenue and unfavorable foreign exchange.
Impact of Foreign Exchange
Q1 2025 revenues were unfavorably impacted by approximately $31.1 million year-over-year due to foreign exchange, affecting both Clear Aligner and Systems and Services revenues.
Decrease in Operating Margin
Q1 2025 operating margin was 13.4%, down 1.1 points sequentially and 2.1 points year-over-year, impacted by unfavorable foreign exchange and product mix shifts.
Lower Clear Aligner ASPs
Q1 2025 Clear Aligner average per case shipment price decreased by $110 year-over-year due to higher discounts, product mix shift to lower-priced products, and unfavorable foreign exchange.
Company Guidance
During the Align Technology First Quarter 2025 Earnings Call, the company provided detailed guidance for its fiscal year. It reported Q1 revenues of $979.3 million, with Clear Aligner revenues up 0.3% sequentially and Systems and Services revenues down 9.2% sequentially. The Clear Aligner volume grew 6.2% year-over-year, driven by strong growth in the APAC and EMEA regions. The company expects Q2 2025 revenues to range between $1.05 billion and $1.07 billion, with Clear Aligner volumes and ASPs both expected to increase sequentially. For the full fiscal year 2025, Align anticipates mid-single-digit growth in Clear Aligner volume and Systems and Services revenues to grow faster than Clear Aligner revenues. The fiscal year revenue growth is projected to be between 3.5% and 5.5% at current spot rates, with a GAAP operating margin approximately 2 points above 2024's margin and a non-GAAP operating margin around 22.5%.

Align Tech Financial Statement Overview

Summary
Align Tech maintains a generally strong financial profile with solid profitability, stable leverage, and efficient cash management. Despite stagnant revenue growth and increased operational costs, the company manages operations effectively, maintaining healthy margins and a robust balance sheet.
Income Statement
75
Positive
Align Tech demonstrates a solid financial performance with a consistent gross profit margin around 70% and a healthy net profit margin near 10% over recent periods. However, revenue growth has been stagnant with a slight decline in the TTM period compared to the previous year, indicating potential market challenges or saturation. EBIT and EBITDA margins have also shown resilience, although they've slightly decreased due to increased operational costs.
Balance Sheet
80
Positive
The balance sheet of Align Tech depicts a stable financial position with a low debt-to-equity ratio of approximately 0.02, suggesting minimal leverage and strong financial health. Return on Equity (ROE) is moderately strong, hovering around 10%, highlighting efficient use of equity. The equity ratio remains robust at around 62%, indicating a solid capital structure and a high degree of financial solvency.
Cash Flow
78
Positive
Align Tech's cash flow performance is strong, with consistent free cash flow generation and a positive operating cash flow to net income ratio. Recent periods show a healthy free cash flow to net income ratio, illustrating efficient cash management. However, the free cash flow growth has been moderate, reflecting stable but unspectacular cash flow expansion.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.98B4.00B3.86B3.73B3.95B2.47B
Gross Profit
2.78B2.80B2.72B2.63B2.94B1.76B
EBIT
584.59M607.63M643.34M642.60M976.40M387.17M
EBITDA
804.14M753.99M799.04M755.38M1.09B480.71M
Net Income Common Stockholders
409.56M421.36M445.05M361.57M772.02M1.78B
Balance SheetCash, Cash Equivalents and Short-Term Investments
884.03M1.04B972.74M999.58M1.17B960.84M
Total Assets
5.90B6.21B6.08B5.95B5.94B4.83B
Total Debt
126.78M119.28M126.62M126.91M125.38M86.18M
Net Debt
-705.61M-924.61M-810.82M-815.14M-974.00M-874.66M
Total Liabilities
2.42B2.36B2.45B2.35B2.32B1.60B
Stockholders Equity
3.48B3.85B3.63B3.60B3.62B3.23B
Cash FlowFree Cash Flow
630.74M622.65M608.06M276.83M771.45M507.26M
Operating Cash Flow
762.24M738.23M785.78M568.73M1.17B662.17M
Investing Cash Flow
-200.62M-254.91M-195.94M-213.32M-563.43M-231.51M
Financing Cash Flow
-550.76M-355.72M-598.34M-501.69M-458.33M-30.81M

Align Tech Technical Analysis

Technical Analysis Sentiment
Positive
Last Price180.62
Price Trends
50DMA
173.58
Positive
100DMA
184.80
Negative
200DMA
205.93
Negative
Market Momentum
MACD
0.88
Positive
RSI
52.54
Neutral
STOCH
77.40
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 180.62 is below the 20-day moving average (MA) of 181.39, above the 50-day MA of 173.58, and below the 200-day MA of 205.93, indicating a neutral trend. The MACD of 0.88 indicates Positive momentum. The RSI at 52.54 is Neutral, neither overbought nor oversold. The STOCH value of 77.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 2 New Risks
1.
Our effective tax rate may vary significantly from period to period, which could result in volatility of our operating results and adversely affect our financial results. Q4, 2024
2.
Products in our Systems and Services segment, such as our iTero intraoral scanners, are subject to software and hardware risks that, if improperly managed, could have a material adverse impact on our business and financial results. Q4, 2024

Align Tech Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SNSNN
80
Outperform
$13.31B32.067.82%2.38%4.58%55.99%
STSTE
80
Outperform
$23.98B39.289.46%0.91%0.32%62.82%
76
Outperform
$21.94B56.1137.92%23.49%71.25%
73
Outperform
$13.09B32.8710.84%1.64%-9.60%
ZBZBH
70
Outperform
$18.28B20.477.31%1.04%3.30%-2.39%
68
Neutral
$8.11B44.824.63%32.26%112.87%
54
Neutral
$5.31B3.29-45.39%2.79%16.77%-0.07%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALGN
Align Tech
180.62
-75.08
-29.36%
PODD
Insulet
311.77
119.73
62.35%
SNN
Smith & Nephew Snats
30.26
4.74
18.57%
STE
Steris
243.72
21.14
9.50%
ZBH
Zimmer Biomet Holdings
92.38
-19.51
-17.44%
GMED
Globus Medical
59.92
-6.27
-9.47%

Align Tech Corporate Events

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.

The most recent analyst rating on (ALGN) stock is a Buy with a $400.00 price target. To see the full list of analyst forecasts on Align Tech stock, see the ALGN Stock Forecast page.

Stock BuybackBusiness Operations and Strategy
Align Tech Announces New $1 Billion Stock Buyback
Positive
May 6, 2025

On May 6, 2025, Align Technology announced a new $1 billion stock repurchase program, following the completion of a previous $1 billion program. This initiative reflects the company’s strong financial position and commitment to increasing shareholder value while investing in strategic growth opportunities. The announcement underscores Align’s confidence in its market opportunities and growth trajectory.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.