On Thursday, Piper Sandler adjusted its outlook on Align Technology (NASDAQ:ALGN), increasing the stock price target to $375 from $355 while sustaining an Overweight rating on the stock. This adjustment comes in response to Align Technology's robust first-quarter earnings, which surpassed Wall Street's expectations.
Align Technology reported a significant first-quarter beat, with revenue reaching $997 million and earnings per share (EPS) at $2.14, both figures outperforming the Street's projections of $975 million in revenue and an EPS of $1.97. Furthermore, the company's management has provided second-quarter guidance that exceeds analyst expectations and has upgraded its forecast for the full year.
The company's iTero Lumina product has had a successful launch, contributing to the positive performance. Align Technology's management has also reaffirmed their perception of stability within the end-market.
These developments are particularly noteworthy given the mixed performance of other consumer discretionary companies in recent weeks. After the market closed, Align Technology's shares experienced a 5% increase.
The momentum behind Align Technology's stock is attributed to ongoing improvements in the demand for clear aligners and the introduction of new products. These factors are anticipated to continue driving the stock's upward trajectory in the near term.
Piper Sandler's stance is that the stock has the potential for further appreciation throughout the remainder of 2024, supported by sustained enhancements to the profit and loss statement and continued performance above Wall Street's estimates. The revised price target of $375 reflects these higher forward estimates.
InvestingPro Insights
Following Piper Sandler's upbeat revision of Align Technology's (NASDAQ:ALGN) price target, real-time data from InvestingPro provides a deeper financial perspective on the company. Align Technology boasts a market capitalization of $22.91 billion, emphasizing its significant presence in the market.
The company's P/E ratio stands at 51.74, indicating a premium valuation that investors are willing to pay for its earnings, which aligns with the InvestingPro Tip highlighting its high earnings multiple. Additionally, Align Technology has shown a revenue growth of 5.72% over the last twelve months as of Q1 2024, signaling steady business expansion.
InvestingPro Tips further reveal that Align Technology has been actively engaging in share buybacks, a move that often reflects management's confidence in the company's future prospects. Moreover, the company has delivered a strong return over the last three months, with a 19.71% price total return, suggesting a positive short-term investment outlook.
For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available, which can be accessed through the InvestingPro platform using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With the next earnings date set for July 24, 2024, investors will be keen to see if Align Technology can maintain its momentum and continue to exceed analyst expectations.
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