Align Tech (ALGN) AI Stock Analysis

• Market Cap: $12.30B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 33.2
• Beta (1Y): 1.36
• Revenue Growth: 0.56%
• EPS Growth: -12.05%
• Country: US
• Employees: 21,200
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 2.61
• Shares Outstanding: 71,749,990
• 10 Day Avg. Volume: 828,455
• 30 Day Avg. Volume: 1,007,077
• PEG Ratio: -11.35
• Price to Book (P/B): 4.05
• Price to Sales (P/S): 3.90
• P/FCF Ratio: 25.07
• Enterprise Value/Market Cap: 0.66
• Enterprise Value/Revenue: 2.05
• Enterprise Value/Gross Profit: 2.99
• Enterprise Value/Ebitda: 10.93
• 1Y Price Target: $180.00
• Price Target Upside: 4.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 10.98
• Revenue Forecast (FY): $4.17B

• Rating: 74 Outperform
• Price Target: $192.00 ▲(11.96% Upside)

Align Tech's strong financial performance and positive earnings call insights are offset by valuation concerns and technical resistance. The company's strategic focus on growth and operational realignment is promising, but economic uncertainties and competitive pressures remain challenges.

Positive Factors

Revenue Growth

Sustained growth in Clear Aligner volumes indicates strong market demand and effective product positioning, supporting long-term revenue expansion.

Product Innovation

Continuous innovation in digital solutions enhances Align's competitive edge and strengthens its market position in orthodontics.

Cash Flow Management

Robust cash flow management ensures Align can invest in growth opportunities and maintain financial flexibility, supporting long-term stability.

Negative Factors

North America Retail Challenges

Challenges in the North American retail channel may hinder growth, impacting revenue and market penetration in a key region.

Systems and Services Revenue Decline

Declining Systems and Services revenue suggests potential weaknesses in product sales, which could affect overall profitability and growth.

Operating Margin Decline

A decline in operating margins indicates cost pressures and may affect profitability, challenging Align's ability to sustain its financial performance.

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 generates revenue primarily through the sale of its Invisalign clear aligners, which account for a significant portion of its earnings. The company's revenue model is built on a direct sales approach to orthodontists and general dentists, who prescribe the aligners to patients. Align also earns income from the sale of iTero scanners and related software, which are used for digital impressions and treatment planning. Key revenue streams include the direct sales of aligners, scanner sales, and subscription fees from its software solutions. Additionally, Align Technology has established partnerships with dental professionals and organizations, enhancing its market presence and contributing to its revenue growth. Factors such as rising consumer demand for aesthetic dental treatments, the expansion of its product offerings, and increased adoption of digital dentistry also play a significant role in boosting the company's earnings.

Align Tech Financial Statement Overview

Summary

Align Tech shows strong revenue growth and profitability with a robust balance sheet. However, challenges in cash flow growth and slight margin compression need attention.

Income Statement

Align Tech demonstrates strong revenue growth with a TTM growth rate of 44.9%, indicating robust demand for its products. The company maintains healthy profitability margins, with a gross profit margin of 69.8% and a net profit margin of 11.0% in the TTM. However, there is a slight decline in EBIT and EBITDA margins compared to previous years, suggesting increased operational costs or pricing pressures.

Balance Sheet

The balance sheet is solid, with a low debt-to-equity ratio of 0.031, indicating prudent financial management and low leverage. The return on equity is stable at 11.3%, reflecting efficient use of shareholder funds. The equity ratio of 63.5% underscores a strong capital structure with significant equity backing.

Cash Flow

Cash flow metrics show mixed results. The free cash flow to net income ratio is high at 92.8%, indicating efficient cash generation relative to earnings. However, the free cash flow growth rate is negative at -6.7%, suggesting potential challenges in cash generation. The operating cash flow to net income ratio is moderate at 36.6%, pointing to a need for improved cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.98B	4.00B	3.86B	3.73B	3.95B	2.47B
Gross Profit	2.72B	2.80B	2.71B	2.63B	2.94B	1.76B
EBITDA	745.27M	816.80M	799.05M	779.84M	1.09B	480.71M
Net Income	378.40M	421.36M	445.05M	361.57M	772.02M	1.78B
Balance Sheet
Total Assets	6.23B	6.21B	6.08B	5.95B	5.94B	4.83B
Cash, Cash Equivalents and Short-Term Investments	1.00B	1.04B	972.74M	999.58M	1.17B	960.84M
Total Debt	121.27M	119.28M	126.62M	126.91M	125.38M	86.18M
Total Liabilities	2.28B	2.36B	2.45B	2.35B	2.32B	1.60B
Stockholders Equity	3.96B	3.85B	3.63B	3.60B	3.62B	3.23B
Cash Flow
Free Cash Flow	566.63M	622.65M	608.06M	276.83M	771.45M	507.26M
Operating Cash Flow	656.12M	738.23M	785.78M	568.73M	1.17B	662.17M
Investing Cash Flow	-130.44M	-254.91M	-195.94M	-213.32M	-563.43M	-231.51M
Financing Cash Flow	-570.19M	-355.72M	-598.34M	-501.69M	-458.33M	-30.81M

Align Tech Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 171.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 171.49 is above the 20-day moving average (MA) of 163.60, above the 50-day MA of 154.03, and above the 200-day MA of 159.20, indicating a bullish trend. The MACD of 4.87 indicates Negative momentum. The RSI at 67.93 is Neutral, neither overbought nor oversold. The STOCH value of 80.10 is Negative, 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	82 Outperform	$12.64B	30.21	10.01%	―	11.75%	364.73%
UFPT	75 Outperform	$1.98B	30.20	18.31%	―	29.47%	23.24%
ALGN	74 Outperform	$12.30B	33.23	9.58%	―	0.56%	-12.05%
ZBH	73 Outperform	$17.59B	21.96	6.41%	1.05%	5.47%	-23.03%
SNN	69 Neutral	$14.06B	29.09	9.20%	2.28%	5.78%	61.52%
GKOS	58 Neutral	$6.58B	-77.53	-12.19%	―	30.38%	47.64%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%