Is Align Technology Stock Underperforming the S&P 500?

Tempe, Arizona-based Align Technology, Inc. (ALGN) designs, manufactures, and markets Invisalign clear aligners, and iTero intraoral scanners and services for orthodontists and general practitioner dentists. Valued at $11.4 billion by market cap, the company also manufactures software for dental laboratories and dental practitioners.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and ALGN fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical instruments & supplies industry. ALGN’s focus on smooth, technologically advanced approach to orthodontic treatment by combining sophisticated 3D digital scanning with custom aligner production, along with its strong brand reputation and emphasis on innovation, keeps it at the forefront of the industry.

Despite its notable strength, ALGN slipped 33.1% from its 52-week high of $246.19, achieved on Dec. 11, 2024. Over the past three months, ALGN stock gained 23.8%, outperforming the S&P 500 Index’s ($SPX) 5.4% gains during the same time frame. 

In the longer term, ALGN shares fell 12.5% on a six-month basis and dipped 30.6% over the past 52 weeks, considerably underperforming SPX’s six-month gains of 14% and 14.1% returns over the last year. 

To confirm the bullish trend, ALGN has been trading above its 200-day moving average recently, despite a negative price momentum. The stock is trading above its 50-day moving average since late October.

On Oct. 29, ALGN shares closed down marginally after reporting its Q3 results. Its adjusted EPS of $2.61 beat Wall Street expectations of $2.37. The company’s revenue was $995.7 million, surpassing Wall Street forecasts of $971.5 million.

ALGN’s rival, DENTSPLY SIRONA Inc. (XRAY), has lagged behind the stock, with a 29% dip on a six-month basis and 40.4% losses over the past 52 weeks.

Wall Street analysts are reasonably bullish on ALGN’s prospects. The stock has a consensus “Moderate Buy” rating from the 15 analysts covering it, and the mean price target of $174.54 suggests a potential upside of 6.1% from current price levels.