Align Technology, Inc. (NASDAQ:ALGN) Just Reported And Analysts Have Been Lifting Their Price Targets
It's been a good week for Align Technology, Inc. (NASDAQ:ALGN) shareholders, because the company has just released its latest annual results, and the shares gained 3.4% to US$273. Align Technology reported in line with analyst predictions, delivering revenues of US$3.9b and statutory earnings per share of US$5.81, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Align Technology after the latest results.
Check out our latest analysis for Align Technology
After the latest results, the 15 analysts covering Align Technology are now predicting revenues of US$4.05b in 2024. If met, this would reflect an okay 4.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 24% to US$7.23. In the lead-up to this report, the analysts had been modelling revenues of US$4.06b and earnings per share (EPS) of US$7.18 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 8.6% to US$308despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Align Technology's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Align Technology at US$344 per share, while the most bearish prices it at US$215. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Align Technology's past performance and to peers in the same industry. We would highlight that Align Technology's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Align Technology.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Align Technology's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Align Technology going out to 2026, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
