Align Tech (ALGN) AI Stock Analysis

• Market Cap: $13.65B
• Dividend Yield: N/A
• Average Volume (3M): 1.33M
• Price to Earnings (P/E): 34.3
• Beta (1Y): 1.50
• Revenue Growth: 1.64%
• EPS Growth: -9.60%
• Country: US
• Employees: 21,200
• Sector: Healthcare
• Sector Strength: 41
• Industry: Medical - Devices
• EPS (TTM): 2.13
• Shares Outstanding: 72,484,840
• 10 Day Avg. Volume: 956,153
• 30 Day Avg. Volume: 1,334,611
• PEG Ratio: -13.96
• Price to Book (P/B): 3.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $229.10
• Price Target Upside: 21.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Align Tech exhibits a solid financial foundation with healthy profitability and a robust balance sheet, complemented by strategic initiatives like a stock buyback program. However, the high valuation and mixed earnings call results present challenges. Technical indicators suggest moderate momentum, warranting cautious optimism.

Positive Factors

Growth and Innovation

Management is targeting 5-15% growth driven by new product launches in direct 3D printing, Lumina platform expansions, AI capabilities, and new go-to-market strategies.

Product Expansion

Align Technology showcased its new occlusal blocks, expanding treatment offerings for Class II Cases, which represents innovation and potential growth.

Stock Repurchase

The company authorized a new $1Bn share repurchase program after completing its previous $1Bn program.

Negative Factors

Financial Targets

Align Technology's medium-term revenue growth target was adjusted to a more modest range, reflecting a step back from previously ambitious goals.

Product Mix Impact

The company expects 2025 Clear Aligner ASPs to be down year on year due to continued product mix shift to non-comprehensive clear aligner products with lower list prices.

Revenue Growth Outlook

The company tempered its medium-term financial targets, now calling for lower revenue growth compared to 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 sale of its Invisalign clear aligners, which are customized for each patient and sold primarily to orthodontists and general practitioner dentists. The company also earns revenue from its iTero intraoral scanners and services, which facilitate 3D digital scanning and are used for orthodontic and restorative dentistry. Align Tech's revenue model is heavily reliant on the dental market's demand for innovative orthodontic solutions, and the company often partners with dental professionals to expand its market reach. Additionally, the company invests in direct-to-consumer marketing to raise awareness and increase adoption of its products. Key factors contributing to Align Tech's earnings include technological advancements, brand recognition, and its extensive network of trained dental professionals who recommend and administer its products.

Align Tech Financial Statement Overview

Summary

Align Tech maintains a generally strong financial profile with solid profitability, stable leverage, and efficient cash management. However, revenue growth has plateaued, indicating potential market challenges.

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
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
2.79B	2.80B	2.71B	2.63B	2.94B	1.76B
	EBIT
615.72M	607.63M	643.34M	642.60M	976.40M	293.63M
	EBITDA
728.07M	816.80M	799.04M	755.38M	976.40M	387.17M
	Net Income Common Stockholders
409.56M	421.36M	445.05M	361.57M	772.02M	1.78B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
873.01M	1.04B	972.74M	999.58M	1.17B	960.84M
	Total Assets
6.10B	6.21B	6.08B	5.95B	5.94B	4.83B
	Total Debt
86.49M	119.28M	126.62M	126.91M	102.66M	64.44M
	Net Debt
-786.52M	-924.61M	-810.82M	-815.14M	-996.71M	-896.40M
	Total Liabilities
2.31B	2.36B	2.45B	2.35B	2.32B	1.60B
	Stockholders Equity
3.79B	3.85B	3.63B	3.60B	3.62B	3.23B
Cash Flow		Free Cash Flow
656.03M	622.65M	608.06M	276.83M	771.45M	507.26M
	Operating Cash Flow
762.24M	738.23M	785.78M	568.73M	1.17B	662.17M
	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 Price: 188.29
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 188.29 is above the 20-day moving average (MA) of 180.37, above the 50-day MA of 170.26, and below the 200-day MA of 208.86, indicating a neutral trend. The MACD of 4.62 indicates Negative momentum. The RSI at 61.52 is Neutral, neither overbought nor oversold. The STOCH value of 68.48 is Neutral, 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
SNN	77 Outperform	$12.63B	30.60	7.82%	2.49%	4.58%	55.99%
PODD	76 Outperform	$22.85B	58.44	37.92%	―	23.49%	71.25%
STE	76 Outperform	$24.72B	40.58	9.45%	0.89%	-0.17%	-17.34%
ALGN	74 Outperform	$13.65B	34.26	10.84%	―	1.64%	-9.60%
ZBH	70 Outperform	$19.18B	21.49	7.31%	0.99%	3.30%	-2.39%
GMED	68 Neutral	$8.29B	45.81	4.63%	―	32.26%	112.87%
Sector *	52 Neutral	$5.15B	3.02	-44.64%	2.83%	16.44%	-0.47%

Align Tech Corporate Events

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.

Spark’s Take on ALGN Stock

According to Spark, TipRanks’ AI Analyst, ALGN is a Outperform.

Align Tech’s overall performance is strong, with solid financial health and strategic initiatives like a stock buyback. However, stagnating revenue growth and a high valuation pose challenges. The mixed earnings call results and technical indicators suggest cautious optimism.

To see Spark’s full report on ALGN stock, click here.

Align Tech Completes $1 Billion Stock Buyback

Align Technology announced on February 25, 2025, its plan to repurchase $225 million of its common stock, completing its $1.0 billion stock repurchase program approved in January 2023. This move reflects the company’s strong financial position and confidence in its growth strategy, aiming to provide value to shareholders while continuing to transform the orthodontic industry through strategic investments.