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Align Technology, Inc. (ALGN), headquartered in Tempe, Arizona, designs, manufactures, and markets Invisalign clear aligners, and iTero intraoral scanners and services for orthodontists and general practitioner dentists. With a market cap of $17.1 billion, the company also manufactures software for dental laboratories and dental practitioners.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and ALGN fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical instruments & supplies industry. ALGN’s focus on smooth, technologically advanced approach to orthodontic treatment by combining sophisticated 3D digital scanning with custom aligner production, along with its strong brand reputation and emphasis on innovation, keeps it at the forefront of the industry.
Despite its notable strength, ALGN slipped 31.8% from its 52-week high of $335.40, achieved on Mar. 21. Over the past three months, ALGN stock fell 9.6%, underperforming the Nasdaq Composite’s ($NASX) 14.1% gains during the same time frame.
In the longer term, ALGN shares fell 16.5% on a YTD basis and dipped 10.3% over the past 52 weeks, underperforming NASX’s YTD gains of 34% and 35.7% returns over the last year.
To confirm the bearish trend, ALGN has been trading below its 200-day moving average since late April. The stock is trading above its 50-day moving average late November.
ALGN has experienced lower than expected performance due to heightened seasonality in their clear aligner business and subdued consumer sentiment in the U.S. dental market. Additionally, global geopolitical challenges and healthcare labor shortages have also impacted the company.
On Oct. 23, ALGN shares closed down more than 1% after reporting its Q3 results. The company’s total revenues of $977.9 million, fell short of Wall Street forecasts of $991.2 million. Its adjusted EPS was $2.35, surpassing analyst estimates of $2.31. For Q4, ALGN expects revenue to be between $995 million and $1 billion.
ALGN’s rival, DENTSPLY SIRONA Inc. (XRAY) shares have lagged behind the stock, plummeting 46.1% on a YTD basis and 44.2% over the past 52 weeks.
Wall Street analysts are moderately bullish on ALGN’s prospects. The stock has a consensus “Moderate Buy” rating from the 12 analysts covering it, and the mean price target of $268.82 suggests a potential upside of 17.5% from current price levels.
