Align Technology’s Stock Struggles Despite Positive Q3 Earnings
Tempe, Arizona-based Align Technology, Inc. (ALGN) is well-known for creating Invisalign clear aligners and iTero intraoral scanners used by dentists and orthodontists. With a market capitalization of $17.1 billion, Align operates in more than 90 countries and has provided services to over 18 million customers globally.
Over the past year, Align Technology has experienced challenges in the stock market. In 2024, ALGN stock has dropped by 16.2%, while it has gained approximately 6% over the last 12 months. This performance falls short of the S&P 500 Index, which has soared by 25.8% year-to-date and 31.8% over the past year.
In more detailed comparisons, ALGN has lagged behind the SPDR S&P Health Care Equipment ETF (XHE), which achieved gains of 11.3% in 2024 and 25% over the past year.
On October 23, ALGN stock climbed by 4.2% following the announcement of its Q3 earnings. The company revealed plans to buy back up to $275 million of its own shares starting in Q4, which bolstered investor confidence. The adjusted earnings per share (EPS) increased by 9.8% year-over-year, reaching $2.35, showcasing strong profitability.
However, total revenues increased only 1.8% year-over-year to $977.9 million, falling short of analysts’ expectations. This disappointment stemmed from unexpected seasonality in the clear aligner market and persistent weak consumer sentiment in the U.S. dental sector. Comparatively, ALGN saw a 4.9% decline in revenues and a 2.5% drop in adjusted EPS from Q2 results.
For the current fiscal year ending in December, analysts predict ALGN will achieve a 13.1% year-over-year growth in adjusted EPS, reaching $7.45. The company’s history of meeting earnings expectations has been mixed, with two of the past four quarters seeing earnings above analyst estimates and the other two falling short.
The consensus rating for ALGN stock is a “Moderate Buy.” Out of 11 analysts covering the stock, six recommend a “Strong Buy,” one opts for a “Moderate Buy,” three suggest a “Hold,” and one advises a “Moderate Sell” rating.
On October 24, Morgan Stanley (MS) analyst Erin Wright maintained an “Overweight” rating and adjusted the price target to $280, signaling a potential upside of 21.9% from current levels.
The average price target for ALGN stands at $265.60, suggesting a potential increase of 15.6%. Notably, the highest price target among analysts is $320, indicating a remarkable 39.3% upside from current prices.
On the date of publication, Aditya Sarawgi 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. More news from Barchart
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