Align Technology (ALGN) is a high-growth leading player in the orthodontics market, headquartered in San Jose, California. It develops clear aligners called Invisalign and 3D (three-dimensional) digital scanners. The company’s clear aligners have witnessed rapid growth in recent years, driven by strong market demand from customers who are shifting from metal braces to clear aligners. The company announced its fiscal 4Q17 and fiscal 2017 earnings on January 30, 2018.
Let’s look now at recent Wall Street analysts’ recommendations and target prices for the next 12 months for ALGN stock.
On February 23, 2018, according to a Reuters survey of 12 investment research firms, ALGN stock has “buy” or “strong buy” recommendations from ten (or 83%) of those firms. Two (or 17%) of the firms gave ALGN stock a “hold” rating. None of the analysts gave it a “sell” recommendation.
As of February 23, 2018, analysts’ consensus target price for ALGN stock for the next 12 months was $292.27, thus providing an estimated potential 12-month investment return of 12.5%. That’s based on the stock’s closing price of $259.68 on February 22, 2018.
For a diversified exposure to Align Technology, investors can invest in the iShares Russell 1000 Growth (IWF), which holds 0.15% of its total portfolio in ALGN stock. Investors can also consider industry-specific exposure and invest in the Health Care Select Sector SPDR ETF (XLV). ALGN makes up 0.58% of XLV’s total holdings.
On February 23, 2018, Align’s peers Zimmer Biomet Holdings (ZBH), Dentsply Sirona (XRAY), and Henry Schein (HSIC) had average analyst target prices of $141.05, $71.38, and $78.44, respectively, for the next one year. These target prices imply one-year return potentials of 20%, 25%, and 15.4%, respectively.
Recent analyst recommendations
On January 31, 2018, Piper Jaffray reiterated its “buy” rating for ALGN stock and gave it a target price of $300. That same day, Credit Suisse reaffirmed its “buy” rating for the stock and raised its target price from $276 to $290. Investment banking firms Jefferies and Leerink Partners also increased their price targets on ALGN stock, from $280 to $300 and from $300 to $305, respectively.
On January 30, 2018, the same day Align Technologies released its fiscal 4Q17 and fiscal 2017 earnings results, Stifel raised its target price on the stock from $265 to $295.