On Thursday, Piper Sandler adjusted its price target on Align Technology stock, listed on (NASDAQ:ALGN), from $275.00 to $270.00, while maintaining an Overweight rating. The dental technology company, currently valued at $16.15 billion, trades at a P/E ratio of 36.8x, reflecting its premium market position. According to InvestingPro data, five analysts have recently revised their earnings expectations downward for the upcoming period. The move followed the company’s fourth-quarter earnings report, which showed results in line with Wall Street expectations in terms of cases, revenue, and earnings per share (EPS). With a revenue growth of 4.03% over the last twelve months, Align Technology’s guidance for the future was seen as a realistic assessment of the current sluggish macroeconomic environment, with a potential for modest acceleration in case volume growth thanks to strong performance in select international markets.
Align Technology’s fourth-quarter performance did not come as a surprise to those who have been monitoring macroeconomic and foreign exchange developments, according to Piper Sandler. The analyst’s previous reports had not predicted an exceptional outcome for the quarter. The company’s shares experienced a modest decline of 6% in after-hours trading. This reaction was attributed to the ongoing uncertainty about an increase in unit demand, especially in the U.S. market.
Despite the after-hours dip, Piper Sandler views the current stock price as an attractive entry point for investors. This assessment aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued. The firm’s perspective is bolstered by the company’s outlook for 2025 and recent comments from management that have reduced concerns about tariff risks from Mexico. Notably, management has been actively buying back shares, demonstrating confidence in the company’s future prospects.
Align Technology’s management provided a balanced outlook that acknowledges the challenges posed by the current economic climate while also recognizing opportunities for growth. The company’s guidance, which did not shock market observers, suggests a cautious but optimistic stance as it navigates through a period of modest case volume increases in certain international regions.
The lowered price target reflects Piper Sandler’s analysis of Align Technology’s recent earnings and forward-looking statements. The Overweight rating indicates that the firm still sees potential value in the stock despite the slight adjustment in the price target. For deeper insights into Align Technology’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Align Technology reported a slight miss in its fourth quarter earnings, with adjusted earnings per share standing at $2.44, marginally below the $2.46 consensus estimate. The company’s revenue for the same period was $995.2 million, a 4.0% increase year over year, yet just shy of the anticipated $1 billion. In addition to these developments, Align Technology provided a weaker-than-expected guidance for the first quarter, forecasting revenue between $965 million to $985 million, notably lower than Wall Street’s projection of $1.03 billion. The company attributed this to unfavorable foreign exchange rates and reduced capital equipment sales due to seasonal factors.
Align Technology’s CEO, Joe Hogan, reported that Q4 total revenues, Clear Aligner volumes, and Systems and Services revenues were in line with their Q4 outlook. Clear Aligner shipments saw a 6.1% YoY growth, amounting to 628,730 cases. For the full year of 2024, the company reported a revenue of $4.0 billion, marking a 3.5% increase from 2023, and shipped 2.49 million Clear Aligner cases, reflecting a similar 3.5% growth.
The company’s outlook for 2025 anticipates low single-digit revenue growth and mid-single digit Clear Aligner volume growth. However, Align expects unfavorable foreign exchange rates to impact results by approximately 2 percentage points. These are some of the recent developments concerning Align Technology.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.