Align Technology: Attractive Entry After Q3 Beat And Multiple Compression
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Narek Hovhannisyan348 FollowersFollow5ShareSavePlay(18min)CommentsSummaryAlign Technology (ALGN) is now rated Buy with a $180 target, offering ~10% upside after a significant correction and strong Q3 results. Q3 beat expectations: international demand and children's segment drove higher volumes, though average selling prices declined due to discounts and new markets. Adjusted operating margins improved to 23.9%, with aggressive buybacks and restructuring supporting EPS growth; GAAP margins impacted by one-time charges. ALGN trades at a 40-60% discount to historical multiples, remains debt-light, and has substantial buyback capacity through 2028, supporting valuation recovery. Monty Rakusen/DigitalVision via Getty Images Investment Thesis Align Technology (ALGN) shares, in my opinion, are now noticeably oversold, and in terms of multiples they are trading at a clear discount to historical averages. I wrote about theThis article was written byNarek Hovhannisyan348 FollowersFollowHi there! I’m Narek, and I’ve been in the investment world for over six years. I started out as an equity analyst at European banks, digging into reports and learning how to spot value in the markets. I’ve worked across sectors — from telecom to industry — and found that behind every financial statement is a real story. I studied in Belgium — did my bachelor’s in Antwerp, master’s at KU Leuven, and later completed an MBA in Finance at Vlerick. That journey gave me both theory and hands-on skills. Now I’m building my own investment project focused on the CIS region. I’m passionate about applying Western analytical tools to uncover hidden value in emerging markets. If you enjoy deep, fundamentals-driven research and digging beneath the surface of a company — glad to have you on board!Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsWhat are the key drivers for ALGN’s upside to the $180 target?Upside is driven by international demand, recovery in U.S. sales, margin expansion from restructuring, aggressive share buybacks, and valuation discounts to historical averages.How does ALGN’s capital allocation support EPS and shareholder returns?With nearly $1B in cash, minimal debt, and a $1B buyback program authorized through 2028, continued repurchases reduce share count and bolster EPS growth.What are the main risks to ALGN’s recovery and valuation thesis?Sluggish U.S. demand, adverse currency moves, and intensifying competition could pressure volumes, pricing, and margins, especially if rate cuts or economic recovery are delayed.Recommended For You