On Friday, Stifel analysts maintained a Buy rating on Align Technology (NASDAQ:ALGN) stock with a steady price target of $275.00. The positive stance comes as the company undertakes a restructuring initiative that analysts believe will provide more time to achieve a projected earnings per share (EPS) of over $10 by 2025. Align Technology, known for its Invisalign orthodontic devices, also holds a substantial cash position of $14 per share.
The analysts highlighted that Align Technology’s stock has historically bottomed at 20 times the next twelve months’ (NTM) EPS multiple times, suggesting a potentially low entry point for investors. Despite concerns that market conditions could worsen, Stifel’s analysis indicates that the company is well-positioned for a modest acceleration in year-over-year revenue growth by 2025.
The report by Stifel also points to early signs of improvement in the market. According to their fourth-quarter 2024 survey, there is an expectation of robust mid-teen year-over-year growth in Adult Invisalign usage for 2025. Additionally, sentiments among general practitioners and orthodontists are reportedly on the rise, and the company’s market share losses are slowing. Notably, the rapid growth of competitor Angelalign appears to be moderating, which could bode well for Align Technology’s market position.
Align Technology’s restructuring efforts are seen as a strategic move to buy time for the company to reach its financial goals. Stifel’s analysts underscore that while North American case volumes have not yet rebounded as of the fourth quarter of 2024, the overall outlook for 2025 is optimistic given the positive trends identified in their research.
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