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Valued at a market cap of $17.7 billion, Align Technology, Inc. (ALGN) manufactures and markets a system of clear aligner therapy, intra-oral scanners, and CAD/CAM digital services used in dentistry, orthodontics, and dental records storage. Based in Tempe, Arizona, the company is best known for its Invisalign system, which is a clear aligner treatment used to straighten teeth.
Shares of this orthodontics company have significantly underperformed the broader market over the past 52 weeks. ALGN has declined 35% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 25.1%. In 2024, shares of ALGN are down 12.9%, compared to SPX’s nearly 18% gain on a YTD basis.
Zooming in further, ALGN’s underperformance becomes more evident when compared to the Indxx Medical Devices ETF FT’s (MDEV) 10.2% gain over the past 52 weeks and 7.4% return on a YTD basis.
Despite beating earnings estimates, shares of ALGN fell 7.7% following its Q2 earnings release on Jul. 24 due to slightly missing Wall Street’s revenue estimates. This was driven by the lower-than-expected average selling price of Clear Aligner, affected by unfavorable foreign exchange rates and a shift in product mix. The company’s reduced revenue guidance for the year further dampened investor confidence.
For the current fiscal year, ending in December, analysts expect ALGN’s EPS to grow 15.5% year over year to $7.61. The company’s earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 11 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” two “Holds,” one “Moderate Sell,” and one “Strong Sell.”
On Aug. 15, Piper Sandler maintained an “Overweight” rating on Align Technology and reaffirmed its price target of $315, noting the company’s year-over-year increase in clear aligner case volumes.
The mean price target of $288.36 represents a premium of 22.6% to ALGN’s current levels. The Street-high price target of $370, implies a potential upside of 57.3% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
