GICS Sector : Healthcare
Align Technology, Inc., a medical device company, designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services for orthodontists and general practitioner dentists, and restorative and aesthetic dentistry.It operates in two segments, Clear Aligner; and Scanners and Services.The Clear Aligner segment consists of comprehensive products, including Invisalign comprehensive treatment that addresses the orthodontic needs of teenage patients, such as mandibular advancement, compliance indicators, and compensation for tooth eruption; and Invisalign First Phase I and Invisalign First Comprehensive Phase 2 package for younger patients generally between the ages of seven and ten years, which is a mixture of primary/baby and permanent teeth.
Align Technology reported Q4 2025 revenues of $1,047,600,000, up 5.3% year-over-year and 5.2% sequentially, driven by record clear aligner volumes of 677,000 cases, up 7.7% year-over-year. Non-GAAP gross margin was 72%, and non-GAAP operating margin was 22.7% for the full year 2025. The company's net income per diluted share was $1.89, up $1.11 sequentially and up 50¢ compared to the prior year. On a non-GAAP basis, net income per diluted share was $3.29, beating analyst estimates of $2.99.
Publication Date: Feb -08
In 2025, total revenues reached a record $4,000,000,000, up 1% year-over-year, with clear aligner revenues of $3,200,000,000, up 0.5% year-over-year. A record 936,000 teens and kids started treatment with Invisalign clear aligners, up 7.8% year-over-year. The company's guidance for 2026 expects worldwide revenues to be in the range of $1,010,000,000 to $1,030,000,000, up 3% to 5% year-over-year.
The company saw a positive impact from productivity improvements and a favorable product mix, contributing to 100 basis points of margin expansion opportunity. Operating expenses decreased by $14.6 million due to lower restructuring costs and slightly higher advertising, marketing, and technology spend. On a non-GAAP basis, operating expenses were $480.9 million, up 3.8% sequentially and up 1.3% year-over-year.
With a P/E Ratio of 35.88 and an EV/EBITDA of 16.88, the market is pricing in a certain level of growth for Align Technology. Analysts estimate next year's revenue growth at 4.4%, which is slightly higher than the company's guidance. The company's ROE of 9.75% and ROIC of 8.56% indicate a decent return on equity and invested capital.
The company is working to transition customers from older Element iTero scanners to new products like Lumina, with a trade-in allowance to encourage the upgrade. The direct fab business is expected to be margin dilutive in 2026 but is expected to scale and become margin accretive by 2027 or 2028. The guidance for 2026 assumes some margin dilution from direct fab.
Henry Schein One Connects Align Technology's iTero™ Scanners to Dentrix, Dentrix Ascend, and Dentally, Advancing a More Connected Global Standard of Care
Feb -17
Align Technology: Broad-Based Q4 Outperformance Supports Upside
Feb -06
Align Technology Q4 Earnings Call Highlights
Feb -06
The markets are ‘more stable than what we experienced in the past,' says Align Technology CEO
Feb -06
Align Technology (NASDAQ:ALGN) Shares Gap Up Following Better-Than-Expected Earnings
Feb -06
Stock Futures Lower Amid Tech Malaise, Dismal Jobs Data
Feb -05
ALGN Stock Climbs on Q4 Earnings and Revenue Beat, Margins Down
Feb -05
AE Wealth Management LLC Takes Position in Align Technology, Inc. $ALGN
Feb -05
Align Technology's Clear Aligner growth is driven by increasing adoption in orthodontics and dentistry, expanding into new markets, and rising demand for aesthetic and convenient teeth straightening solutions. Additionally, the company's investments in digital marketing, sales force expansion, and strategic partnerships contribute to its growth.
Align Technology's Systems and Services segment growth is driven by increasing adoption of digital orthodontics, rising demand for Invisalign clear aligners, and expansion of iTero scanner sales. Additionally, strategic partnerships, geographic expansion, and investments in digital platforms contribute to the segment's 6% growth.
A series of custom-made, clear, removable aligners that gradually move teeth into their desired position.
A simplified, express version of Invisalign Clear Aligners for mild orthodontic cases.
A digital impression system that captures detailed 3D images of teeth and gums.
A portable, handheld intraoral scanner for dental impressions and oral examinations.
A software platform for orthodontists to plan and visualize treatment outcomes.
Align Technology, Inc. has a low threat of substitutes due to its unique and patented technology in the orthodontic and dental industries.
The bargaining power of customers is medium as Align Technology, Inc. has a diverse customer base, but some large customers may have negotiating power.
The bargaining power of suppliers is low as Align Technology, Inc. has a diversified supply chain and is not heavily dependent on a single supplier.
The threat of new entrants is low due to the high barriers to entry in the orthodontic and dental industries, including regulatory hurdles and significant capital requirements.
The intensity of rivalry is medium as Align Technology, Inc. operates in a competitive market, but has a strong market position and differentiated products.
| Value | |
|---|---|
| Debt Weight | 3.37% |
| Debt Cost | 3.95% |
| Equity Weight | 96.63% |
| Equity Cost | 12.26% |
| WACC | 11.98% |
| Leverage | 3.49% |
Value: 0.4
Growth: 8.2
Quality: 7.3
Yield: 0.0
Momentum: 8.0
Volatility: 5.0
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