Can Robust Invisalign Momentum Drive Align Technology's Q2 Earnings?

Align Technology, Inc. ALGN is set to release second-quarter 2025 results on July 30, after the closing bell.

The company posted adjusted earnings per share (EPS) of $2.13 in the last reported quarter, which topped the Zacks Consensus Estimate by 7.6%. Align Technology beat on earnings in each of the trailing four quarters, the average surprise being 3.40%.

ALGN’s Q2 Estimates

The Zacks Consensus Estimate for revenues is pegged at $1.06 billion, which suggests a rise of 3.2% from the year-ago reported figure.

The Zacks Consensus Estimate for earnings is pinned at $2.57 per share, which implies a 6.6% rise from the year-ago recorded actuals.

Estimate Revision Trend Ahead of ALGN’s Q2 Earnings

Estimates for second-quarter earnings have remained unchanged at $2.57 per share in the past 30 days.

Let's take a look at how things might have shaped up for the MedTech major prior to the announcement.

Factors at Play

Clear Aligner Business

Similar to the last reported quarter, Align Technology is likely to have witnessed strength in Clear Aligner volumes for teens and adult patient, reflecting growth across regions, especially APAC and EMEA. Growth in the APAC and EMEA regions is likely to have been driven the orthodontic and GP dentist channels across teens, kids and adult patients. Meanwhile, we expect Clear Aligner volume growth in in North America to have persisted in the to-be-reported quarter, driven by growth in Invisalign DSP touch-up cases, Invisalign Palate Expander system, as well as Invisalign Comprehensive Three and Three.

In the first quarter, Clear Aligner volume from DSO customers increased year over year, reflecting growth across all regions. The DSO business in the United States continued to outpace the retail doctors, driven by the company’s largest DSO partners — SmileDoctors and Heartland Dental. This might have benefited the company’s quarterly top line.

In the second quarter, its Invisalign Palatal Expander System received approval from the National Medical Products Administration (“NMPA”) in China. Additionally, Align Technology introduced the Invisalign System with mandibular advancement featuring occlusal blocks. It is designed to address Class II skeletal and dental correction by simultaneously advancing the mandible while aligning the teeth. The system is commercially available in the United States, Canada, Australia and New Zealand. These factors, too, might have aided Align Technology’s second-quarter revenues.

Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote

Imaging Systems & CAD/CAM Service Business

The Systems & Services business is projected to have witnessed growth in the second quarter due to increased scanner volumes and non-system revenues driven by iTero Lumina wand upgrades. The continuous uptake of the iTero Lumina Scanner with ortho workflow and positive response from customers are likely to have boosted the company’s revenues.

In the previous quarter, Align Technology launched its next-generation iTero Lumina solutions with comprehensive capabilities, including the Near Infra-Red Imaging technology in the iTero Lumina Pro dental imaging system. Also, it launched Align X-ray Insights — a new software-based computer-aided detection solution that uses artificial intelligence (AI) to automatically analyze 2D radiographs — in the EU countries and the United Kingdom. We expect these developments to have positively impacted the company’s second-quarter top line.

What Our Quantitative Model Predicts for ALGN

Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:

Earnings ESP: Align Technologies has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks Worth a Look

Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this reporting cycle:

CVS Health CVS has an Earnings ESP of +2.06% and a Zacks Rank #2 at present. The company is slated to release second-quarter 2025 results on July 31. You can see the complete list of today’s Zacks #1 Rank stocks here.

CVS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.08%. The Zacks Consensus Estimate for second-quarter EPS implies a year-over-year decline of 19.7%.

Cencora COR has an Earnings ESP of +1.49% and a Zacks Rank #2 at present. The company is slated to release third-quarter fiscal 2025 results on Aug. 6.

The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.00%. The Zacks Consensus Estimate for fiscal third-quarter EPS implies a year-over-year increase of 13.2%.

Cardinal Health CAH has an Earnings ESP of +0.68% and a Zacks Rank #2 at present. The company is expected to release fiscal fourth-quarter 2025 results on Aug. 12.

CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.30%. The Zacks Consensus Estimate for fiscal fourth-quarter EPS suggests a year-over-year improvement of 1.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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