Reasons to Add Align Technology Stock to Your Portfolio Now

Align Technology’s ALGN successful efforts to broaden the Invisalign business are poised to bring significant growth in the upcoming quarters. Also, iTero is gaining from the rapidly evolving intraoral scanning technology in the industry. A sound financial stability is beneficial for the stock as well. However, unfavorable foreign exchange raises concerns about the company’s operations.

In the past year, this Zacks Rank #2 (Buy) company’s shares have lost 22.2% compared with 1.6% decline of the industry. In contrast, the S&P 500 composite has risen 11.3%.

The renowned medical device company has a market capitalization of $11.66 billion. ALGN projects a long-term estimated earnings growth rate of 11.2% compared with 9.9% growth of the industry. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.

Let’s delve deeper.

Upsides for ALGN Stock

Invisalign Business Expansion: Align Technology’s Invisalign portfolio offers orthodontic treatment to straighten teeth without metal braces. Among the recent developments, Align Technology continues to commercialize the Invisalign Palatal Expander with steady momentum for doctor's submitters and shipments. In the first quarter, the company received approval from the Turkish Medicines and Medical Device Agency to market the Invisalign Palatal Expander system in Turkey. 

During the first quarter, the company made its Invisalign system available with Mandibular Advancement featuring Occlusal Blocks in the United States, Canada, Australia and New Zealand. It is designed specifically for Class II skeletal and dental correction by simultaneously advancing the mandible while aligning the teeth.

In the past few quarters, ALGN has progressed well with the Invisalign DSP touchup cases. The company also strengthened ties with global DSOs, including key partners Smile Docs and Heartland Dental, to boost digital adoption in dentistry. Additionally, Align Technology advanced adoption of the ‘my Invisalign’ app and saw continued growth in the use of digital tools like ClinCheck.

iTero in Focus:  Align Technology’s iTero intraoral scanners, as the preferred scanning technology for digital dental scans, are successfully expanding their foothold in the niche market globally. In terms of the latest developments with iTero, in the first quarter, Align Technology announced the addition of restorative capabilities to its next-generation iTero Lumina intraoral scanner and the new iTero Lumina Pro dental imaging system. The idea was to enable efficient restorative and multidisciplinary ortho-restorative workflows and support the diagnosis of interproximal caries above the gingiva. In 2024, the company began a limited market release of restorative software on the iTero Lumina scanner. iTero Lumina is currently available with orthodontic workflows as a new standalone scanner or a wand upgrade from the iTero Element 5D Plus scanner.

Strong Solvency: With no debt on its balance sheet, Align Technology looks quite comfortable from the liquidity point of view. The company’s first-quarter cash and cash equivalents totaled $873 million compared with $1.04 million at the end of 2024. The cumulative net cash provided by operating activities at the end of the first quarter was $52.2 million compared with $28 million in the year-ago period.

Downsides for ALGN Stock

Currency Headwinds: Foreign exchange is a significant headwind for Align Technology, as a considerable portion of its revenues is generated outside the United States. During the first quarter, both business segments experienced an unfavorable foreign exchange impact. 

ALGN Stock Estimate Trend

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has remained constant at $10.33 in the past 30 days.

The Zacks Consensus Estimate for 2025 revenues is pegged at 4.15 billion, suggesting a 3.9% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Chemed CHE, Hims & Hers Health HIMS and Cencora COR. 

Chemed has an estimated earnings and revenue growth rate of 9% each in 2025. Its earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed in the other two. The company delivered an earnings surprise of 0.5% in the last reported quarter. Its shares have gained 2.5% compared with the industry’s 7.1% growth in the past year.

CHE carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hims & Hers Health, currently carrying a Zacks Rank #2, has an earnings yield of 1.3% against the industry’s -10.1%. Shares of the company have surged 129.7% compared with the industry’s 35.9% gain. HIMS’ earnings surpassed estimates in two of the trailing four quarters, matched once and missed in the other, the average surprise being 2.8%.

Cencora, carrying a Zacks Rank #2 at present, has an earnings yield of 5.4% compared with the industry’s 3.8%. Shares of the company have rallied 25.9% against the industry’s 14.4% decline. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6%.

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

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