Stifel maintains Buy rating on Align Technology shares

On Monday, Stifel, a financial services company, maintained its Buy rating and $400.00 price target for Align (NASDAQ:ALGN) Technology, which trades on NASDAQ under the ticker NASDAQ:ALGN.

The firm's analysis suggests that if Align Technology 's 2024 guidance is sustained, the company's year-over-year revenue growth could accelerate to a high-single-digit percentage in the second half of 2024. This growth trajectory could potentially lead to a rally in the stock price as it aligns with the company's short-term earnings per share trend and compares favorably with its peers.

The firm's commentary indicates that Align Technology's stock performance is contingent on the company's ability to meet its 2024 guidance. Should the guidance be reduced, the stock may face downward pressure as investors adjust their expectations to a lower growth range of low-single to mid-single-digit percentages for the latter half of 2024 into 2025. This recalibration would influence the perceived valuation of the company.

The analysis also notes that while U.S. consumer confidence has shown recent signs of weakening, which typically correlates with case volumes for Align Technology, international consumer confidence has remained more resilient.

This contrast could contribute to a globally stable operating environment, which the company's management has identified as crucial for executing their strategy and maintaining their guidance for 2024.

The financial services firm's stance is informed by its research, which underscores the importance of worldwide consumer confidence levels in Align Technology's performance. The company's ability to execute in a stable worldwide environment is considered key to upholding its financial guidance for the upcoming year.

In other recent news, Align Technology has been in the spotlight with several key developments. Evercore ISI recently adjusted its outlook on Align Technology, reducing the price target to $300 from the previous $370 while maintaining an Outperform rating.

This adjustment follows the release of May website traffic data, indicating that case volumes are set to increase sequentially from the first quarter of 2024. The firm's analysis also suggests that Align Technology's equipment business is expected to boost the company's performance in the upcoming quarter and the latter part of the year.

In terms of financial performance, Align Technology reported a 5.8% year-over-year increase in total worldwide revenues for the first quarter of 2024, amounting to $997.4 million. This growth was primarily driven by the Clear Aligner segment and the Systems and Services segment. The company also announced the acquisition of Cubicure and the launch of new products like the iTero Lumina intraoral scanner and the Invisalign Palatal Expander system.

Piper Sandler maintained an Overweight rating and a $375.00 price target for Align Technology's stock, highlighting the company's stable market environment.

The firm's analysis pointed out a mid-single-digit year-over-year growth in aligner volumes in recent times, surpassing historical month-over-month averages. These recent developments underline Align Technology's commitment to growth and innovation, projecting a revenue growth of 6% to 8% for fiscal 2024.

InvestingPro Insights

Align Technology, the company behind the revolutionary Invisalign clear aligners, has been exhibiting financial metrics that could intrigue investors. According to real-time data from InvestingPro, Align Technology has a market capitalization of $18.65 billion and is trading at a P/E ratio of 40.5, which adjusts to 39.31 for the last twelve months as of Q1 2024. This valuation comes in light of a revenue growth of 5.72% over the same period, signaling a steady upward trajectory in the company's financial performance. Additionally, the firm's gross profit margin stands robust at 70.4%, which is a testament to its operational efficiency.

From the perspective of InvestingPro Tips, it's notable that Align Technology has a perfect Piotroski Score of 9, indicating strong financial health. Furthermore, the company's management has been actively repurchasing shares, a sign that could be interpreted as confidence in the company's future prospects. These insights could be particularly relevant for investors, given the recent analysis by Stifel on the company's potential to accelerate revenue growth in the second half of 2024. Investors interested in a deeper dive into Align Technology's financials can explore additional tips on InvestingPro, where there are currently 11 more tips available to help with investment decisions. For those looking to take advantage of these insights, remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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