Align Tech (ALGN) AI Stock Analysis

• Market Cap: $13.83B
• Dividend Yield: N/A
• Average Volume (3M): 833.71K
• Price to Earnings (P/E): 34.7
• Beta (1Y): 1.44
• Revenue Growth: 1.64%
• EPS Growth: -9.60%
• Country: US
• Employees: 21,200
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Devices
• EPS (TTM): 2.13
• Shares Outstanding: 72,484,840
• 10 Day Avg. Volume: 877,503
• 30 Day Avg. Volume: 833,707
• PEG Ratio: -15.02
• Price to Book (P/B): 3.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.22
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 4.75
• Enterprise Value/Ebitda: 4.08
• 1Y Price Target: $233.91
• Price Target Upside: 22.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 74 Outperform
• Price Target: $225.00 ▲(17.94%Upside)

Align Technology's solid financial performance and recent corporate actions, like the stock buyback, are key strengths. Technical indicators and valuation suggest some caution is warranted due to overbought signals and high P/E ratio. Earnings call highlights growth in Clear Aligner volumes, but challenges in other segments and FX impacts present risks.

Positive Factors

Growth Potential

ALGN is undervalued vs. its current growth potential, presenting an appealing investment opportunity.

Strategic Initiatives

Steady adoption of the Lumina platform, AI-driven tools, and expansion in emerging markets are expected to drive future growth.

Negative Factors

Market Challenges

Structural and market challenges limit upside for Align Technology, leading to an Underperform rating and $195 price objective.

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 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 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 Financial Statement Overview

Summary

Align Tech shows solid financial health with strong profitability and a stable balance sheet. Despite stagnant revenue growth, the company maintains robust margins and efficient cash management, which supports its overall financial performance.

Income Statement

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

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

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.00B	3.86B	3.73B	3.95B	2.47B
Gross Profit	2.80B	2.72B	2.63B	2.94B	1.76B
EBITDA	753.99M	799.04M	755.38M	1.09B	480.71M
Net Income	421.36M	445.05M	361.57M	772.02M	1.78B
Balance Sheet
Total Assets	6.21B	6.08B	5.95B	5.94B	4.83B
Cash, Cash Equivalents and Short-Term Investments	1.04B	972.74M	999.58M	1.17B	960.84M
Total Debt	119.28M	126.62M	126.91M	125.38M	86.18M
Total Liabilities	2.36B	2.45B	2.35B	2.32B	1.60B
Stockholders Equity	3.85B	3.63B	3.60B	3.62B	3.23B
Cash Flow
Free Cash Flow	622.65M	608.06M	276.83M	771.45M	507.26M
Operating Cash Flow	738.23M	785.78M	568.73M	1.17B	662.17M
Investing Cash Flow	-254.91M	-195.94M	-213.32M	-563.43M	-231.51M
Financing Cash Flow	-355.72M	-598.34M	-501.69M	-458.33M	-30.81M

Align Tech Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 190.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGN, the sentiment is Neutral. The current price of 190.77 is below the 20-day moving average (MA) of 192.73, above the 50-day MA of 185.75, and below the 200-day MA of 199.16, indicating a neutral trend. The MACD of 2.89 indicates Positive momentum. The RSI at 50.08 is Neutral, neither overbought nor oversold. The STOCH value of 19.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALGN.

Align Tech Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNN	80 Outperform	$13.20B	31.95	7.86%	2.49%	5.16%	56.79%
ALGN	74 Outperform	$13.83B	34.71	10.84%	―	1.64%	-9.60%
ZBH	74 Outperform	$18.44B	20.65	7.31%	1.29%	3.30%	-2.39%
GMED	74 Outperform	$7.63B	42.14	4.63%	―	32.26%	112.87%
STE	71 Outperform	$22.19B	35.55	9.46%	1.24%	0.32%	64.36%
PODD	70 Outperform	$20.00B	51.15	37.92%	―	23.49%	71.25%
Sector *	46 Neutral	C$195.87M	-3.27	-23.14%	2.82%	20.75%	-0.36%

Align Tech Corporate Events

Align Tech Approves Key Proposals at Annual Meeting

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.

Align Tech Announces New $1 Billion Stock Buyback

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.