Align Technology (ALGN) Valuation in Focus After Earnings Miss and Securities Investigation News

If you own or are eyeing shares of Align Technology (ALGN), the latest string of headlines is hard to ignore. The company’s release of its second-quarter 2025 results fell short of Wall Street expectations, and management trimmed its sales outlook for the rest of the year, citing persistent economic uncertainty and softer demand. In addition, news broke of a securities fraud investigation into Align’s leadership, adding a fresh layer of uncertainty for investors looking to gauge what comes next.

These consecutive developments have not gone unnoticed by the market. Align’s stock price took a sharp hit immediately after the earnings announcement, and the move was compounded by the ongoing investigations. The stock has lagged this year as negative momentum built up; over the past year, shares are down more than 37%, and the past three years have shown a similar decline. Even with recent volatility offering up buying opportunities, as highlighted by the Artisan Mid Cap Value Fund’s new position in the stock, the overall trend has been a steady slide.

After such a dramatic reset in expectations, is there genuine value left on the table for investors willing to stomach the risks, or is the market already factoring in the company’s future growth prospects?

Most Popular Narrative: 23.8% Undervalued

According to the most widely followed narrative, Align Technology appears undervalued by a significant margin compared to its estimated fair value. The analysis highlights future growth drivers and company investments that may not be fully reflected in the current share price.

Demand for Invisalign remains robust across international markets, especially in APAC, EMEA, and Latin America. Rising incomes and a growing middle class are increasing access to discretionary dental procedures. As consumer confidence returns, this pent-up global demand is likely to accelerate revenue growth.

Curious what’s fueling this bold fair value estimate? Unlock the secrets behind the narrative’s bullish outlook, including financial assumptions, revenue trends, and margin projections that set this valuation apart from the market’s view. Which forward-looking numbers and strategic bets are behind the analysts’ confidence? The big details await.

Result: Fair Value of $186.36 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent economic uncertainty and shifting treatment preferences toward traditional braces could limit Align’s anticipated growth. This may present challenges to the company’s recovery story.

Find out about the key risks to this Align Technology narrative.

Another View: What Does Our DCF Model Say?

Looking at Align Technology from a different angle, our DCF model also points to the stock being undervalued at current levels. However, do the long-term cash flow assumptions truly stand up to scrutiny? Are there hidden risks waiting to emerge?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Align Technology for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Align Technology Narrative

If you have a different perspective or want to dive into the numbers yourself, it's easy to craft your own forecast in just a few minutes. Do it your way

A great starting point for your Align Technology research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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