Align Technology (ALGN) Stock Forecast & Price Target

Align Technology maintains a dominant position in the clear aligner market, holding over 90% market share with its flagship product, Invisalign, which has treated over 14 million patients since 1998. In the most recent financial results, while clear aligner sales of $804.6 million fell short of expectations, the company achieved a notable increase in Scanner/Services revenue, bringing in $207.8 million, representing a 5.6% year-over-year growth. Looking forward, management anticipates that restructuring efforts will contribute to at least a 100 basis point improvement in operating margin percentage by 2026, reinforcing the company's long-term financial outlook.

Align Technology has experienced weak operating performance, as evidenced by adjusted earnings per share (EPS) of $2.49, which fell short of market expectations by nearly ten cents. Additionally, the company's adjusted gross margin percentage declined by 40 basis points year-over-year to 70.5%, while operating margin percentage dropped significantly to 21.3%, indicating a miss on profitability metrics. Furthermore, the outlook for the third quarter suggests potential challenges, including a forecasted decrease in systems and services revenue due to seasonality and an expectation of flat adjusted gross margins.