Align Technology (ALGN) Stock Forecast & Price Target

Align Technology's strong market position is underscored by its ability to capture a substantial share of the orthodontic market, with over 2 million Invisalign cases treated in 2022, representing approximately 10% of all orthodontic cases for that year. The company's emphasis on digital scanning technology, with iTero scans comprising over half of the submissions for Invisalign cases, contributes to operational efficiencies and is likely to facilitate continued growth in this segment. Furthermore, despite recent revenue figures falling slightly short of expectations, the company demonstrated notable year-over-year increases in teen case starts and anticipations of sequential growth in volumes and average selling prices, pointing towards a positive trajectory for future performance.

Align Technology has experienced a recent decline in operating performance, resulting in an adjusted earnings per share (EPS) of $2.49, which fell short of the expected $2.57. The company's adjusted gross margin percentage decreased by 40 basis points year-over-year to 70.5%, with operating margin percentage also coming in below expectations at 21.3%, reflecting ongoing revenue visibility challenges and a difficult macroeconomic environment. Furthermore, management has revised its long-term growth expectations for clear aligners downward, projecting lower single-digit year-over-year volume growth and flat to slightly increasing revenue growth, raising concerns about future performance prospects.