On Tuesday, Piper Sandler reaffirmed its Overweight rating on Align Technology (NASDAQ:ALGN) with a steady price target of $355.00. The firm's analysis highlighted the growing preference for Invisalign among teenagers, with a recent survey showing an increase to 88% from the prior 86% in past surveys. This uptick in teen preference for Invisalign is seen as a reinforcement of the brand's leadership in the market.
The survey's findings suggest that Invisalign continues to strengthen its position in the clear aligner industry, particularly among the younger demographic. Piper Sandler did not expect a significant shift in brand preference, but the increase in Invisalign's favorability indicates continued consumer confidence and brand strength.
Align Technology's brand leadership in the teen market is also likely to reflect positively on its standing in the adult market. The analyst noted that the recent bankruptcy and market exit of SmileDirectClub (OTC:SDCCQ) (SDC), a competitor in the clear aligner space, may have contributed to Invisalign's increased brand preference.
The expectation is that Align Technology will see some benefits from SDC's departure, particularly in the adult market, which was previously served by SDC. The impact is anticipated to be more pronounced in the segment of less comprehensive treatments that SDC traditionally targeted.
Align Technology's market position and consumer preference metrics suggest a positive outlook for the company as it potentially gains from the reduced competition in the clear aligner market. The $355.00 price target by Piper Sandler remains unchanged, reflecting confidence in Align Technology's market performance and brand strength.
InvestingPro Insights
As Align Technology (NASDAQ:ALGN) continues to solidify its leadership in the clear aligner sector, particularly among teens, the company's financial metrics and market behavior provide additional layers of insight. Align Technology boasts a robust market capitalization of $24.04 billion, underscoring its significant presence in the industry. Despite trading at a high earnings multiple with a P/E ratio of 54.74 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 52.89, the company's stock has seen a strong return over the last three months, with a price total return of 15.33%.
InvestingPro Tips reveal that management has been actively buying back shares, which can be a sign of leadership's belief in the company's value. Moreover, analysts predict that Align Technology will be profitable this year, a sentiment that is backed by the company's profitable performance over the last twelve months. These factors, combined with a high EBITDA growth of 3.99% in the last twelve months as of Q4 2023, may interest investors looking for companies with growth potential and confident management.
For those seeking a deeper analysis, InvestingPro offers additional insights and metrics. There are 12 more InvestingPro Tips available for Align Technology, which can be accessed by visiting https://www.investing.com/pro/ALGN. To further enrich your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and unlock a comprehensive understanding of Align Technology's market position and future prospects.
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