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On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Align Technology , Inc. (NASDAQ:ALGN), a manufacturer of clear orthodontic aligners. The firm’s analyst, Steven Valiquette, reduced the price target on Align Technology stock to $250 from the previous $295, while maintaining an Outperform rating. According to InvestingPro data, nine analysts have recently revised their earnings estimates downward, with price targets ranging from $150 to $295. The stock, currently trading at $170.37, appears undervalued based on InvestingPro’s Fair Value analysis.
The revision follows the latest results from Angelalign, a competitor in the clear aligner market, which is not covered by Mizuho. Despite Angelalign’s market share growth outside of China, the company reported a loss in earnings before interest and taxes (EBIT) for markets outside China, projecting a negative $30 million excluding stock compensation in 2024, as opposed to a positive EBIT of $37 million within China. In contrast, Align Technology maintains strong profitability with a 70% gross margin and has generated $623 million in free cash flow over the last twelve months.
The price target adjustment was influenced by Angelalign’s stock performance, which saw a 14% decline after reporting its results on March 20, 2025, compared to a 1.3% decrease in the Hang Seng Index from March 21 to March 24, 2025.
Valiquette notes that while the model for Align Technology remains unchanged after Angelalign’s results, a more cautious approach has been adopted regarding tariffs in Mexico. This caution has led to a decreased gross margin estimate for 2025, resulting in a revised earnings per share (EPS) forecast of $10.00, down from $10.45.
Further adjustments were made to the 2026 and 2027 average selling price (ASP) and gross margin assumptions to account for foreign exchange impacts. This led to a reduction in the estimated EPS for 2026 from $12.25 to $11.25 and for 2027 from $14.20 to $12.90.
The new price target of $250 is based on a lower 22 times price-to-earnings (P/E) ratio, down from 24 times, applied to the reduced 2026 EPS estimate. Currently trading at a P/E of 30.4x, with an overall "GOOD" financial health score from InvestingPro, the stock shows potential despite recent volatility. Get access to 6 additional exclusive ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks including Align Technology.
In other recent news, Align Technology has introduced a new AI-powered dental diagnostic tool, Align X-ray Insights, in the European Union and the United Kingdom (TADAWUL:4280). This software, part of the Align Digital Platform, is designed to enhance diagnostic accuracy by automatically analyzing dental radiographs. Early users have reported improvements in patient communication and trust when using the tool. Meanwhile, Stifel analysts have maintained their Buy rating for Align Technology, with a price target of $275, highlighting the company’s stable market share in China and positive financial indicators such as improved operating margins. In contrast, Piper Sandler adjusted their outlook, lowering Align Technology’s stock target to $235 while maintaining a Neutral rating, citing a decline in aligner volumes due to external factors like weather conditions. Despite these challenges, Piper Sandler noted strong performance in other business areas like iTero and international volumes. Stifel also expressed confidence in Align Technology as a potential investment, supported by favorable Google (NASDAQ:GOOGL) Trends data and the stock’s current valuation.
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