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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:64Neutral
Price Target:
$147.00
▲(0.86% Upside)
Align Tech's overall stock score is driven by strong financial health and positive corporate actions, such as stock repurchases, but is tempered by bearish technical indicators and challenges highlighted in the earnings call. Economic uncertainties and restructuring efforts present additional risks.
Positive Factors
Growth Potential
In almost any situation, ALGN is undervalued vs. its current growth potential.
Strategic Initiatives
Steady adoption of the Lumina platform, incremental gains in AI-driven diagnostics and visualization tools, and gradual expansion in emerging markets like the UAE and Taiwan are expected.
Valuation
The stock is trading at new valuation lows, despite relatively stable end-markets and unchanged long-term growth potential.
Negative Factors
Earnings
Second-quarter sales/EPS were below the Street, and revenue guidance was lowered, leading to a significant drop in stock value.
Macroeconomic Factors
The biggest risk to the stock remains macroeconomic factors, which could worsen in the second half of the year.
Market Dynamics
The clear aligner market is attractive but cyclical, and traditional orthodontics are showing market resilience against aligners.

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

Align Tech Business Overview & Revenue Model

Company DescriptionAlign 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 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: -28.41%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Negative
The earnings call reflected mixed results with growth in the Systems and Services segment and milestones in teen treatments. However, there were significant challenges, including a decline in clear aligner revenues, economic uncertainty impacting performance in North America and Europe, and planned restructuring efforts to address these issues.
Q2-2025 Updates
Positive Updates
Growth in Systems and Services Segment
Q2 revenues in Systems and Services were $207.8 million, an increase of 13.9% sequentially and 5.6% year-over-year, driven by iTero Lumina wand upgrades and increased services.
Record Teen Treatment Milestone
Over 6 million teens and kids have been treated with the Invisalign system globally, with a record number of teen cases in Q2.
Strong Performance in APAC Region
Q2 clear aligner volume grew year-over-year in APAC, especially led by China, driven by increased submitters across both orthodontists and GP channels.
Negative Updates
Decline in Clear Aligner Revenues
Q2 clear aligner revenues were $804.6 million, down 3.3% year-over-year due to lower ASPs from discounts and shifts to lower-priced products.
Challenges in North America and Europe
Lower-than-expected sales in North America and Europe for clear aligners, impacted by economic uncertainty and reduced patient traffic.
Impact of Economic Uncertainty
Economic factors such as U.S. tariff turmoil, inflation, and high interest rates have led to reduced patient traffic and lower-than-expected case conversions.
Restructuring and Cost-Cutting Measures
Align plans to take actions to streamline operations, resulting in onetime charges of $150-$170 million in the second half of 2025, including workforce reductions and asset write-downs.
Company Guidance
During Align's second quarter 2025 earnings call, the company reported mixed results with total revenues at $1.012 billion, reflecting a 3.4% sequential increase but a 1.6% decline year-over-year. The Systems and Services segment saw a robust 13.9% sequential growth to $207.8 million, driven by strong sales of iTero Lumina scanner wand upgrades, despite a shortfall in full system sales. Clear aligner revenues were $804.6 million, up 1% sequentially, largely due to favorable foreign exchange rates, but down 3.3% year-over-year owing to lower ASPs and product mix shifts. The company noted a lower-than-expected volume in North America and Europe, attributed to economic uncertainties, fewer orthodontic starts, and increased competition from traditional braces. Align anticipates continued economic challenges and is planning a series of cost-reduction and operational realignment measures, expecting a GAAP operating margin of 13% to 14% for 2025. Looking ahead, the company projects Q3 2025 revenues between $965 million and $985 million, with a cautious outlook on the demand for clear aligners and new iTero systems, amid ongoing macroeconomic uncertainties.

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 Price145.74
Price Trends
50DMA
180.35
Negative
100DMA
176.52
Negative
200DMA
193.63
Negative
Market Momentum
MACD
-14.42
Positive
RSI
37.03
Neutral
STOCH
53.67
Neutral
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 145.74 is below the 20-day moving average (MA) of 168.71, below the 50-day MA of 180.35, and below the 200-day MA of 193.63, indicating a bearish trend. The MACD of -14.42 indicates Positive momentum. The RSI at 37.03 is Neutral, neither overbought nor oversold. The STOCH value of 53.67 is Neutral, 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
81
Outperform
$24.01B36.969.73%0.94%2.47%63.68%
78
Outperform
$8.36B23.888.62%17.43%775.48%
77
Outperform
$21.80B94.2319.18%25.99%-40.46%
76
Outperform
$15.76B31.819.20%2.07%6.28%61.96%
74
Outperform
$20.17B24.796.52%0.93%4.11%-14.43%
64
Neutral
$10.18B23.7011.41%0.56%0.43%
51
Neutral
$7.42B-0.36-40.86%2.27%22.89%-2.16%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALGN
Align Tech
145.74
-74.29
-33.76%
PODD
Insulet
308.68
117.14
61.16%
SNN
Smith & Nephew Snats
36.78
7.67
26.35%
STE
Steris
247.07
16.58
7.19%
ZBH
Zimmer Biomet Holdings
103.22
-4.42
-4.11%
GMED
Globus Medical
62.79
-4.29
-6.40%

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.

The most recent analyst rating on (ALGN) stock is a Buy with a $350.00 price target. To see the full list of analyst forecasts on Align Tech stock, see the ALGN Stock Forecast page.

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.

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 05, 2025