Align Technology (ALGN) Stock Forecast & Price Target

Align Technology's strong market position is evident as it continues to control over 90% of the clear aligner market through its flagship product, Invisalign, which has treated over 14 million patients since its launch in 1998. The company exhibited positive growth metrics, with new Invisalign case starts increasing 4.9% year-over-year to 647,800 cases, and a notable 8.3% year-over-year growth in teen case starts, particularly noted in the APAC and EMEA regions. Additionally, scanning revenue from the iTero product rose 5.6% year-over-year, contributing to a solid outlook for sequential revenue growth driven by strong trends in key markets.

Align Technology's recent financial performance has raised concerns, as evidenced by an adjusted EPS of $2.49 falling short of expectations by nearly a dime, coupled with a 40 basis point year-over-year decline in adjusted gross margin to 70.5%. This weak operating performance contributed to a significant drop in operating margin, which decreased by 100 basis points year-over-year to 21.3%, indicating challenges at the operating line due to revenue misses. Additionally, management's decision to lower its 2025 clear aligner volume growth forecast from mid-single-digit year-over-year increases to low-single-digit raises red flags about future revenue visibility amid a challenging macro environment.