UBS has revised its target price for Align Technology (ALGN, Financial), reducing it from $240 to $215 while maintaining a Neutral rating on the stock. This adjustment reflects broader macroeconomic challenges currently impacting Align's performance. However, the introduction of enhanced financing options could create potential growth opportunities for the company, according to UBS analysts.
The upcoming investor day on May 6 serves as an important event for Align Technology. It provides the management team with a platform to address market concerns, potentially resetting long-term goals with more achievable targets. During this event, executives are also expected to shed light on new products and their market potential, aiming to fortify investor confidence and reshape the company's strategic outlook.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Align Technology Inc (ALGN, Financial) is $234.32 with a high estimate of $290.00 and a low estimate of $150.54. The average target implies an upside of 32.21% from the current price of $177.23. More detailed estimate data can be found on the Align Technology Inc (ALGN) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, Align Technology Inc's (ALGN, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Align Technology Inc (ALGN, Financial) in one year is $300.34, suggesting a upside of 69.46% from the current price of $177.23. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Align Technology Inc (ALGN) Summary page.
ALGN Key Business Developments
Release Date: February 05, 2025
- Total Revenue: $995.2 million for Q4, up 1.8% sequentially and 4% year-over-year.
- Clear Aligner Revenue: $794.3 million for Q4, up 0.9% sequentially and 1.6% year-over-year.
- Systems and Services Revenue: $200.9 million for Q4, up 5.2% sequentially and 14.9% year-over-year.
- Clear Aligner Volume Growth: 6.1% year-over-year for Q4.
- Non-GAAP Operating Margin: 23.2% for Q4, up 1.1 points sequentially.
- Net Income per Diluted Share: $1.39 for Q4, down $0.16 sequentially.
- Cash and Cash Equivalents: $1,043.9 million as of December 31, 2024.
- Free Cash Flow: $263 million for Q4.
- Operating Expenses: $552.8 million for Q4, up 6.4% sequentially.
- Gross Margin: 70% for Q4, up 0.3 points sequentially.
- Capital Expenditures: $23 million for Q4.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Align Technology Inc (ALGN, Financial) reported Q4 total revenues of $995 million, a 4% increase year-over-year, driven by strong growth in Systems and Services revenues.
- Clear Aligner volumes grew 6.1% year-over-year, with notable strength in the EMEA, APAC, and LatAm regions.
- The company achieved several milestones, including 272,000 active Invisalign trained practitioners and 19.5 million Invisalign patients treated.
- Align Technology Inc (ALGN) saw a record number of doctor submitters worldwide, reflecting increased utilization and growth in both adult and teen segments.
- The iTero Lumina scanner launch was successful, with positive feedback from doctors, and plans to expand its capabilities to include restorative workflows.
Negative Points
- Q4 Clear Aligner ASPs were lower than expected due to unfavorable foreign exchange impacts from a stronger U.S. dollar.
- Operating expenses increased by 11% year-over-year, primarily due to restructuring, advertising, and marketing expenses.
- The orthodontic market in North America has been flat for the last three years, impacting growth in that region.
- Align Technology Inc (ALGN) faces potential challenges from new tariffs on shipments from Mexico to the U.S., which could impact costs.
- The company anticipates a decline in Q1 2025 revenues due to foreign exchange impacts and lower capital equipment sales.
