On Thursday, Stifel analysts sustained their Buy rating for Align Technology (NASDAQ:ALGN) shares with a steady price target of $275.00. According to InvestingPro data, analysts maintain a consensus "Buy" recommendation with price targets ranging from $150 to $290, while the company's Financial Health Score is rated as "GOOD" with strong profitability metrics. The analysts' optimism persists despite recent market challenges, with survey data collected during the market's downturn from April 3-7 indicating positive trends for the company's Invisalign product. The survey revealed that dental providers' expectations for 2025 Adult Invisalign case volumes have remained stable compared to three months prior, showing a net score increase of 1%. Additionally, expectations for the first quarter of 2025 point to a sequential increase in U.S. case volumes, with a net score of 8%. This optimism is supported by the company's solid fundamentals, with InvestingPro data showing a healthy 70% gross profit margin and positive revenue growth of 3.5% over the last twelve months.
The analysts project that Align Technology's first-quarter results may exceed expectations, contrary to the market's anticipation of a miss and a downward revision of the company's 2025 guidance. The current stock price, trading at 10-11 times the projected 2025 EBITDA, seems to factor in these negative outcomes along with a potential recession. According to InvestingPro analysis, the stock appears undervalued at current levels, with multiple ProTips suggesting potential upside. Stifel's research indicates that providers are maintaining their positive outlook for 2025, which aligns with analysts' EPS forecast of $10.08 for the year.
The analysts also speculate on the potential impact of various macroeconomic factors. They suggest that if the first quarter of 2025 shows solid performance and the company's guidance for the year is reiterated, this could be further bolstered by possible tariff resolutions, tax cuts, and a favorable USD trajectory in relation to the 2025 guidance. Should these conditions materialize, Stifel posits that Align Technology's stock could potentially double from its current levels.
In other recent news, Align Technology has been the subject of several analyst updates and product developments. Mizuho Securities maintained its Outperform rating for Align Technology, setting a price target of $250.00, while discussing the impact of global tariff updates on the company's operations. In contrast, Piper Sandler adjusted its price target for Align Technology from $270 to $235, citing a decline in aligner volumes, although it retained a Neutral rating. Stifel analysts have kept their Buy rating with a $275 price target, noting a stabilization in Invisalign's market share, particularly in China.
Align Technology has also introduced a new Invisalign product featuring occlusal blocks, aimed at treating Class II malocclusions in younger patients. This innovation is expected to enhance treatment efficiency and comfort. The product is available in Australia, New Zealand, and select regions in North America and EMEA, with a broader release planned for 2025.
Despite the competitive pressures from Angelalign, which reported significant case volume growth outside China, Align Technology's market share in China showed signs of improvement. Analysts from Stifel and Mizuho have expressed confidence in Align's ability to navigate these challenges, with Mizuho particularly noting the potential benefits from tariff exemptions under the USMCA agreement. Investors are advised to consider these developments as Align Technology continues to adapt to the evolving market landscape.
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