# Align Technology (ALGN) Sector: Dental devices | Field | Value | |---|---| | Price | $147.31 | | Fair value (Analysts) | $195.00 | | Discount to fair value | 24.5% | | Fair value uncertainty (Analysts) | High | | Economic moat (Analysts) | Narrow | | LSEG analyst rating (1 strong buy to 5 strong sell) | 2.47 | | Data as of | 2026-10-16 | | Next earnings | 2026-10-28 (confirmed) | ## In short The market prices Align for slow growth and pressure from cheaper aligners, and steady volume growth with savings from the review pushed by Elliott can close the gap over three to six quarters. ## Themes and gap - Themes: Weak consumer (weak-consumer), New management (management-change), Regulation and courts (regulation-legal) - Gap type: Can close (closable) - Why: The Q3 2026 report and the 2027 outlook with the results of the operating model review in early 2027 show whether growth and margins improve. ## About Align Technology makes the Invisalign system of clear aligners, iTero intraoral scanners and exocad CAD/CAM software for orthodontics and restorative dentistry. Orthodontists and general dentists prescribe Invisalign treatment, and Align makes custom aligners for each patient from digital scans. Clear Aligner revenues were $3.2 billion of total revenues of $4.0 billion in 2025, and Align shipped about 2.6 million Clear Aligner cases that year. The iTero scanners and exocad software connect dental practices to Align's digital workflow. Align is based in Tempe, Arizona, and it sells around the world, with fast growth in Asia Pacific, Europe and Latin America. ## Thesis The market prices Align for slow growth in a business that once grew fast. Align expects 2026 revenue growth of only 3% to 4%, with Clear Aligner volume up about 6% and the average price flat to slightly down. Imaging systems revenue fell 10.8% in Q2 2026, because dentists buy fewer capital goods and choose lower-priced scanners or leases. Other clear aligner makers, including lower-priced brands, compete for the same doctors and patients. In July 2026, after talks with the activist investor Elliott Investment Management, Align agreed to add three new directors, started a review of its strategy and operating model with a consulting firm, and raised its 2026 buyback plan to $400 million to $500 million. For the gap to close, three things must be true. Clear Aligner volume must keep growing at mid-single-digit rates or better, including in North America. The non-GAAP operating margin must reach about 23.7% in 2026, as guided, and rise further after the operating model review. The review must show concrete cost savings and growth plans. The Q3 2026 report on October 28, 2026, is the next test. The Q4 report and the 2027 outlook in early February 2027 are the main test. If these checks pass, the gap can close over the next three to six quarters. The main reason it may not close is a loss of share to lower-priced aligners. ## Checkpoints - Oct 28, 2026: Q3 2026 earnings: aligner volume and margin. Status: Pending. Watch: Revenues within the $1,000 million to $1,020 million outlook, Clear Aligner volume up mid-single digits and a non-GAAP operating margin near 24% pass; results below the outlook fail. - Feb 2027 (estimate): Q4 2026 results and the operating model review. Status: Pending. Watch: A 2027 outlook for faster revenue growth than in 2026 and concrete savings from the review pass; growth below 3% or no clear plan fails. ## Balance sheet - Cash: $1.1B - Debt: $0.0M - Net cash: $1.1B - Undrawn credit line: $300M, to December 2027 Align has no debt and funds its operations with cash from operations. At June 30, 2026, cash and cash equivalents were $1.10 billion, up from $1.06 billion at March 31, 2026. Its $300 million unsecured revolving credit facility, amended in March 2026, matures on December 23, 2027, and nothing was borrowed under it. In Q2 2026, Align bought back about 393,400 shares at an average price of $169.45, and $733.3 million remained under its $1.0 billion repurchase program. Align plans to buy back $400 million to $500 million of shares in 2026. It expects 2026 capital expenditures of $125 million to $150 million. Interest cover is not shown, because Align has no debt. As of 2026-06-30. Sources: - https://www.sec.gov/Archives/edgar/data/1097149/000109714926000054/algn-q226earningspressrele.htm - https://www.sec.gov/Archives/edgar/data/1097149/000109714926000060/algn-20260630.htm ## Recent events - 2026-08-27: The board appointed Quentin Blackford as a director and increased the board to eleven members. - 2026-07-29: Align reported Q2 2026 results. Revenues rose 4.3% to a record $1.06 billion, and Clear Aligner volume rose 7.4% to a record 691.8 thousand cases. Imaging Systems and CAD/CAM Services revenues fell 10.8%. GAAP EPS was $1.51, after a $38 million UK VAT liability, and non-GAAP EPS was $2.64. Align expected Q3 2026 revenues of $1,000 million to $1,020 million and kept its 2026 revenue growth outlook of 3% to 4%. - 2026-07-29: After talks with Elliott Investment Management, Align said that it will add three new independent directors and review its strategy and operating model with a global consulting firm. It raised its 2026 share repurchase plan to $400 million to $500 million. - 2026-07-06: Julie Coletti, Chief Legal and Regulatory Officer, resigned to join Illumina as Chief Legal Officer, effective August 1, 2026. - 2026-06-17: C. Raymond Larkin, Jr. said that he will retire as Chairman on July 1, 2026, and leave the board on December 31, 2026. The board named Kevin Conroy, an independent director, as Chairman from July 1, 2026. ## Risks - High: Clear aligners face more competition, including lower-priced products. Align expects its 2026 Clear Aligner average price to be flat to slightly down. More price pressure can lower revenue growth and margins. - Medium: Demand for orthodontic treatment depends on consumer spending, and many adult patients pay themselves. Imaging Systems and CAD/CAM Services revenues fell 10.8% in Q2 2026, because dentists bought fewer capital goods. A weak economy can slow both businesses. - Medium: Align faces antitrust class actions and other lawsuits. At June 30, 2026, it had accrued $31.8 million for legal settlements, mostly for one antitrust class action, and it recorded a $38 million liability for UK VAT in Q2 2026. New rulings can cause further costs. - Low: The board, the chairman and the chief legal officer changed in 2026, and an operating model review with a consulting firm is under way. Large changes can distract management, and the review may not give the expected savings. ## Links - Page: https://picks.kamadorueda.com/company/ALGN/ - History of changes: https://picks.kamadorueda.com/company/ALGN/history/ - JSON with full history: https://picks.kamadorueda.com/data/company/ALGN.json > Picks is a personal record of stock picks. It gives information only, not financial, investment, tax or legal advice. Prices, fair values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.