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Align Tech (ALGN)
NASDAQ:ALGN
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Align Tech
(NASDAQ:ALGN)60Neutral
Positive Factors
Financial Performance
Align Technology's EBIT margin guidance for 2025 is above the market's current projection, indicating better-than-expected operational efficiency.
Market Position
As the market leader in clear aligners with approximately two-thirds share and strong brand recognition, Align Technology is seen to have a durable and competitive moat.
Negative Factors
Revenue Outlook
Despite higher Invisalign case growth, the revenue outlook for Align Technology is expected to be lower than current market views due to foreign exchange headwinds.
Align Tech (ALGN) vs. S&P 500 (SPY)
Market Cap
$12.79B
Dividend YieldN/A
Average Volume (3M)1.07M
Price to Earnings (P/E)30.9
Beta (1Y)1.95
Revenue Growth3.54%
EPS Growth-3.41%
CountryUS
Employees21,610
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)5.62
Shares Outstanding73,597,650
10 Day Avg. Volume1,262,724
30 Day Avg. Volume1,068,410
Financial Highlights & Ratios
PEG Ratio1.52
Price to Book (P/B)N/A
Price to Sales (P/S)3.20
Price to Cash Flow (P/CF)11.20
P/FCF Ratio11.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$261.90Price Target Upside50.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Align Tech Business Overview & Revenue Model
Company DescriptionAlign Technology, Inc. is a global medical device company primarily known for its Invisalign system, a proprietary method of straightening teeth using clear, removable aligners. Founded in 1997 and headquartered in San Jose, California, Align Tech operates within the dental and orthodontic sectors. The company's core offerings include the Invisalign product line, iTero intraoral scanners, and OrthoCAD digital services, which together aim to improve dental treatment processes and outcomes.
How the Company Makes MoneyAlign 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 demonstrates a solid financial performance with strong revenue growth and efficient cost management. The balance sheet is robust with low leverage, and the company maintains healthy cash flow levels. While profitability margins have slightly declined, the overall financial health remains strong with a solid equity base and effective cash generation.Income Statement
Align Tech has shown a steady increase in revenue over the years, with a 3.54% growth from 2023 to 2024. The gross profit margin is robust at 69.98% for 2024, indicating efficient cost management. However, there is a slight decline in EBIT margin from 16.66% in 2023 to 15.19% in 2024, and the net profit margin has decreased from 11.52% in 2023 to 10.54% in 2024, reflecting some pressure on profitability.70
Positive
Balance Sheet
The company maintains a strong financial position with a low debt-to-equity ratio of 0.02 as of 2024, indicating low leverage. Return on equity is stable at 10.94%, showing effective utilization of shareholder equity. The equity ratio stands at a healthy 61.98%, underscoring a solid capital structure with a majority of assets financed by equity.75
Positive
Cash Flow
Operating cash flow has decreased slightly from 2023 to 2024, but free cash flow has increased significantly by 21.39%, reflecting improved cash generation capabilities. The operating cash flow to net income ratio is a strong 1.75, indicating healthy cash generation relative to earnings. However, the free cash flow to net income ratio stands at 1.75, showing a good but not outstanding conversion of income to cash.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.99B | 4.00B | 3.86B | 3.73B | 3.95B | 2.47B | Gross Profit |
| 2.90B | 2.80B | 2.71B | 2.63B | 2.94B | 1.76B | EBIT |
| 858.41M | 607.63M | 643.34M | 642.60M | 976.40M | 293.63M | EBITDA |
| 903.78M | 816.80M | 799.04M | 755.38M | 976.40M | 387.17M | Net Income Common Stockholders |
| 619.03M | 421.36M | 445.05M | 361.57M | 772.02M | 1.78B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 898.91M | 1.04B | 972.74M | 999.58M | 1.17B | 960.84M | Total Assets |
| 6.16B | 6.21B | 6.08B | 5.95B | 5.94B | 4.83B | Total Debt |
| 126.42M | 88.21M | 126.62M | 126.91M | 102.66M | 64.44M | Net Debt |
| -739.39M | -955.67M | -810.82M | -815.14M | -996.71M | -896.40M | Total Liabilities |
| 2.40B | 2.36B | 2.45B | 2.35B | 2.32B | 1.60B | Stockholders Equity |
| 3.76B | 3.85B | 3.63B | 3.60B | 3.62B | 3.23B |
| Cash Flow | Free Cash Flow | ||||
| 388.62M | 622.65M | 608.06M | 276.83M | 771.45M | 507.26M | Operating Cash Flow |
| 785.40M | 738.23M | 785.78M | 568.73M | 1.17B | 662.17M | Investing Cash Flow |
| -511.59M | -254.91M | -195.94M | -213.32M | -563.43M | -231.51M | Financing Cash Flow |
| -478.97M | -355.72M | -598.34M | -501.69M | -458.33M | -30.81M |
Align Tech Technical Analysis
Negative
173.75
Price Trends
207.00
Negative
214.75
Negative
227.47
Negative
Market Momentum
-12.02
Positive
23.43
Positive
14.96
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGN, the sentiment is Negative. The current price of 173.75 is below the 20-day moving average (MA) of 190.09, below the 50-day MA of 207.00, and below the 200-day MA of 227.47, indicating a bearish trend. The MACD of -12.02 indicates Positive momentum. The RSI at 23.43 is Positive, neither overbought nor oversold. The STOCH value of 14.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $144.73B | 48.87 | 15.26% | 0.85% | 10.23% | -5.74% | |
78 Outperform | $184.84B | 80.81 | 15.62% | ― | 17.24% | 27.76% | |
76 Outperform | $22.87B | 49.36 | 9.61% | 0.96% | -0.17% | -17.34% | |
70 Outperform | $21.50B | 24.36 | 7.24% | 0.89% | 3.84% | -9.29% | |
60 Neutral | $12.79B | 30.90 | 11.26% | ― | 3.54% | -3.41% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
46 Neutral | $3.25B | ― | -34.77% | 3.92% | -4.34% | -634.89% |
* Healthcare Sector Average
Performance Comparison
ALGN
Align Tech
163.39
-144.70
-46.97%
XRAY
DENTSPLY SIRONA
16.05
-16.96
-51.38%
ISRG
Intuitive Surgical
482.61
103.71
27.37%
STE
Steris
231.53
>-0.01
>-0.01%
SYK
Stryker
370.12
17.78
5.05%
ZBH
Zimmer Biomet Holdings
110.65
-16.30
-12.84%
Align Tech Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -19.69% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Align Technology reported record full year revenue and strong growth in Systems and Services, with expanding doctor network and positive product feedback. However, challenges include unfavorable foreign exchange impacts, soft orthodontic market in North America, sequential decline in the teen segment, higher restructuring costs, and operating margin pressure.Highlights
Record Full Year Revenue
Align Technology reported a record full year total worldwide revenue of $4 billion for fiscal 2024, indicating solid progress across the business.
Strong Growth in Systems and Services
Year-over-year revenue growth of 14.9% in the Systems and Services segment, driven by higher scanner volumes and increased non-systems revenues.
Clear Aligner Volume Growth
Fourth quarter Clear Aligner volumes grew 6.1% year-over-year, with strength in EMEA, APAC, and LatAm regions, and stability in North America.
Expanding Doctor Network
Achieved cumulative milestones of 272,000 active Invisalign trained practitioners and 19.5 million Invisalign patients.
Positive Response to New Products
Invisalign Palatal Expander system gaining traction among orthodontists and patients, with positive feedback from parents and a significant milestone in regulatory approvals in Europe.
Lowlights
Impact of Unfavorable Foreign Exchange
Clear Aligner ASPs were lower than expected due to the strengthening of the US dollar, impacting revenue by approximately $14 million in Q4.
Orthodontic Market Challenges in North America
The orthodontic channel in North America remained seasonally soft, with no significant growth over the past three years.
Sequential Decline in Teen and Kids Segment
Approximately 216,000 teens and kids started treatment with Invisalign Clear Aligners during Q4, a decrease of 8.6% sequentially.
Restructuring Costs
Restructuring charges related to severance for impacted employees were higher than anticipated, contributing to increased operating expenses.
Operating Margin Pressure
Q4 operating margin was down 2.1 points sequentially and 3.4 points year-over-year, with unfavorable foreign exchange having a negative impact.
Company Guidance
During the Align Technology Fourth Quarter and Full Year 2024 Earnings Call, the company provided detailed guidance for the upcoming year, highlighting several key metrics. Total revenues for Q4 2024 were reported at $995 million, reflecting a 4% year-over-year increase, with System Services revenues up 14.9% and Clear Aligner revenues up 1.6%. For the full year, total revenues reached $4 billion, marking a 3.5% increase from the previous year. The company achieved a non-GAAP operating margin of 21.8% for fiscal 2024, surpassing fiscal 2023. Looking ahead to 2025, Align expects year-over-year revenue growth in the low single digits, factoring in a 2-point unfavorable impact from foreign exchange. Clear Aligner volume growth is projected to rise by mid-single digits, with ASPs expected to decline due to exchange rates and product mix shifts. Despite these challenges, Align anticipates a 2-point increase in GAAP operating margin for 2025, supported by restructuring actions and continued investments in capital expenditures estimated between $100 million and $150 million.Align Tech Corporate Events
Stock BuybackBusiness Operations and Strategy
Align Tech Completes $1 Billion Stock Buyback
Positive
Feb 25, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.