Why Align Technology (ALGN) Is Down 34.1% After Missed Earnings, Lower Guidance, and Major Restructuring

• In late July 2025, Align Technology reported second-quarter earnings that missed analyst estimates and guided to lower-than-expected revenue for the third quarter and full year, alongside announcing a significant restructuring involving layoffs and restructuring charges of US$150 million to US$170 million.
• These developments come as the company faces softer demand for its clear aligners and increasing scrutiny following the launch of a legal investigation into potential disclosure issues.
• Next, we'll explore how Align's restructuring announcement and reduced outlook may challenge previously optimistic expectations for global growth and margin expansion.

These 19 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.

Align Technology Investment Narrative Recap

To be a shareholder in Align Technology, you would likely need to believe in the company’s ability to reignite growth through product innovation and adoption of its clear aligner systems despite near-term headwinds. The recent revenue miss, lower guidance, and sharp restructuring signal that the most important short-term catalyst, recovery in Clear Aligner demand, is under pressure, while the biggest risk remains further demand softness and potential legal scrutiny on company disclosures.

Among recent announcements, the company’s cautious Q3 and full-year 2025 guidance stands out as particularly relevant, as it directly reflects management’s expectations for revenue and Clear Aligner volumes amid a backdrop of economic uncertainty and softer patient demand. This guidance shift puts a spotlight on whether product rollouts and cost control measures can support the narrative of eventual margin expansion.

In contrast, as investors consider Align’s plans for long-term improvements, they should also be mindful of emerging legal issues that...

Read the full narrative on Align Technology (it's free!)

Align Technology's narrative projects $4.7 billion in revenue and $715.0 million in earnings by 2028. This requires 6.0% yearly revenue growth and a $305.4 million earnings increase from current earnings of $409.6 million.

Uncover how Align Technology's forecasts yield a $234.36 fair value, a 72% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community range from US$110 to US$340, based on 7 individual perspectives. While participants see opportunity, recent disappointing volume growth and legal concerns could weigh on the company’s outlook, consider additional views before making your own assessment.

Explore 7 other fair value estimates on Align Technology - why the stock might be worth over 2x more than the current price!

Build Your Own Align Technology Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Align Technology research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Align Technology's overall financial health at a glance.

Want Some Alternatives?

Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay:

• Uncover the next big thing with financially sound penny stocks that balance risk and reward.
• The latest GPUs need a type of rare earth metal called Neodymium and there are only 25 companies in the world exploring or producing it. Find the list for free.
• The end of cancer? These 25 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com