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Align Technology (ALGN)
:ALGN

Align Tech (ALGN) AI Stock Analysis

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Align Tech

(NASDAQ:ALGN)

Rating:71Outperform
Price Target:
$201.00
▲(6.62%Upside)
Align Tech's strong financial health and strategic initiatives in product expansion and market reach are key strengths. However, challenges in valuation and mixed technical indicators weigh on the overall score. The positive impact of the stock buyback program provides additional support to the stock's outlook.
Positive Factors
Growth Potential
In almost any situation, ALGN is undervalued vs. its current growth potential.
Product Innovation
Align Technology showcased its new occlusal blocks, expanding treatment offerings for Class II Cases, which represents innovation and potential growth.
Share Repurchase
The company authorized a new $1Bn share repurchase program after completing its previous $1Bn program.
Negative Factors
Ambitious Growth Targets
Revised long-range plan's target of 15%+ annual revenue growth beyond 2029 seems ambitious without significant uptake of key growth drivers.
Market Challenges
Structural and market challenges limit upside for Align Technology.
Revenue Growth Target
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., 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 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 Key Performance Indicators (KPIs)

Any
Any
Gross Profit by Segment
Gross Profit by Segment
Chart InsightsAlign Tech's Clear Aligner segment shows fluctuating gross profits with recent stabilization, reflecting strategic market expansions and strong volume growth, particularly in APAC and EMEA. Despite a sequential revenue decline in Systems and Services, the successful launch of the iTero Lumina scanner and expansion into new markets are expected to drive future growth. However, challenges like foreign exchange impacts and lower operating margins could pressure profitability. The company anticipates mid-single-digit growth in Clear Aligner volumes, with Systems and Services revenues projected to outpace this, indicating a strategic focus on diversifying revenue streams.
Data provided by:Main Street Data

Align Tech Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 8.78%|
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 strong financial profile with solid profitability, stable leverage, and efficient cash management. Despite stagnating revenue growth, the company has 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.98B4.00B3.86B3.73B3.95B2.47B
Gross Profit2.78B2.80B2.72B2.63B2.94B1.76B
EBITDA804.14M753.99M799.04M755.38M1.09B480.71M
Net Income409.56M421.36M445.05M361.57M772.02M1.78B
Balance Sheet
Total Assets6.10B6.21B6.08B5.95B5.94B4.83B
Cash, Cash Equivalents and Short-Term Investments873.01M1.04B972.74M999.58M1.17B960.84M
Total Debt118.53M119.28M126.62M126.91M125.38M86.18M
Total Liabilities2.31B2.36B2.45B2.35B2.32B1.60B
Stockholders Equity3.79B3.85B3.63B3.60B3.62B3.23B
Cash Flow
Free Cash Flow630.74M622.65M608.06M276.83M771.45M507.26M
Operating Cash Flow762.24M738.23M785.78M568.73M1.17B662.17M
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 Price188.52
Price Trends
50DMA
180.34
Positive
100DMA
179.08
Positive
200DMA
202.66
Negative
Market Momentum
MACD
2.02
Negative
RSI
59.10
Neutral
STOCH
88.61
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 188.52 is above the 20-day moving average (MA) of 182.32, above the 50-day MA of 180.34, and below the 200-day MA of 202.66, indicating a neutral trend. The MACD of 2.02 indicates Negative momentum. The RSI at 59.10 is Neutral, neither overbought nor oversold. The STOCH value of 88.61 is Negative, 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 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
SNSNN
80
Outperform
$13.15B32.027.82%3.06%4.58%55.99%
STSTE
80
Outperform
$23.49B37.639.46%0.95%0.32%64.36%
76
Outperform
$22.03B56.3437.92%23.49%71.25%
71
Outperform
$13.66B34.3110.84%1.64%-9.60%
ZBZBH
70
Outperform
$18.10B20.277.31%1.05%3.30%-2.39%
68
Neutral
$7.93B43.834.63%32.26%112.87%
51
Neutral
$7.41B0.36-61.88%2.33%17.09%1.64%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALGN
Align Tech
188.52
-50.12
-21.00%
PODD
Insulet
313.08
116.92
59.60%
SNN
Smith & Nephew Snats
30.22
6.32
26.44%
STE
Steris
238.79
22.41
10.36%
ZBH
Zimmer Biomet Holdings
91.46
-13.53
-12.89%
GMED
Globus Medical
58.60
-9.32
-13.72%

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
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: Jun 21, 2025