Should You Continue to Hold ALGN Stock in Your Portfolio?

Align Technology ALGN is well-positioned for growth in the upcoming quarters as it continues to broaden the clinical reach of the Invisalign portfolio beyond traditional adult and teen alignment. The company is focused on increasing adoption of digital dentistry through DSO relationships, doctor support programs and consumer engagement. The iTero business is gaining traction, supported by record new-doctor placements and higher scan volumes. However, weak capital-equipment spending and currency movements continue to pose risks for Align Technology’s results.

Over the past year, this Zacks Rank #3 (Hold) stock has gained 15.1% compared with the 18.2% rise of the industry and the S&P 500 composite’s 16.5% growth.

The renowned medical device company has a market capitalization of $10.80 billion. ALGN projects a long-term estimated earnings growth rate of 10% compared with the 9.3% growth of the industry. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.4%.

Let’s delve deeper.

Upsides for ALGN Stock

Invisalign Business Expansion: Align Technology’s Invisalign Palatal Expander, Invisalign First and Invisalign with Mandibular Advancement featuring Occlusal Blocks broaden treatment options for growing patients and more complex cases. The company expanded its Palatal Expander into key EMEA and APAC markets. The product launched commercially in India, Malaysia and Turkey, received a CE mark covering most of Europe and secured regulatory approval in China. Invisalign with Mandibular Advancement featuring Occlusal Blocks also expanded into India, Malaysia, the Philippines and Thailand, adding to its existing availability in the United States, Canada, Australia and New Zealand.

In the second quarter, teen and growing-patient treatment starts increased 7.2% year over year to 240,000 cases, led by China, Japan, Turkey, India and Brazil. Beyond orthodontics, Align Technology is linking clear aligner treatment with restorative care. The company expanded its Advanced Restorative Treatment initiative, and in the second quarter, exocad launched ART software that combines tooth alignment with restorative treatment planning.

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Strategic Alliances: Align Technology is leaning on dental service organizations, doctor-support programs and consumer outreach to broaden adoption of digital dentistry. The company has established relationships with DSOs, particularly in the United States, and had previously expanded partnerships with groups such as Smile Doctors and Heartland Dental. The strategy remained relevant in the second quarter of 2026, when DSO Clear Aligner volume grew at a double-digit rate year over year.

Align Technology has used digital campaigns across TikTok, Instagram, YouTube, Snapchat and WeChat, along with regional campaigns in Japan, India, Malaysia and Europe. Management’s second-half 2026 outlook assumes continued execution of these customer-focused initiatives, with financing, DSP, clinical education and DSO collaboration cited as areas showing early traction.

iTero in Focus: The company’s iTero intraoral scanners and exocad CAD/CAM software remain central to its digital dentistry strategy because each scan can connect diagnostics, treatment planning, restorative workflows and Clear Aligner conversion. The scanner business is shifting toward lower-cost configurations, certified pre-owned systems, leases and rentals, which reduce upfront revenues but lower the acquisition barrier for practices.

During the second quarter, scanner placements to new doctors reached a record level, increasing at a double-digit rate year over year, while the active installed base grew about 11%. More than 12.4 million restorative, wellness and orthodontic scans were completed in the quarter, up 16% year over year. Exocad revenues also increased at a double-digit rate.

What Ails ALGN Stock?

Macroeconomic Concerns: Align Technology continues to operate in an uneven demand environment because orthodontic treatment and dental capital equipment purchases are sensitive to consumer and practice spending. Management cited softer retail demand and said its outlook does not assume better macroeconomic conditions. The capital equipment market remained weak as higher interest rates and economic uncertainty affected scanner purchasing decisions. This contributed to a 10.8% year-over-year decline in Systems and Services revenues during the second quarter.

Currency Volatility: Foreign exchange remains a recurring source of volatility because a sizable portion of Align Technology’s business is generated outside the United States. In the second quarter of 2026, currency movements reduced gross margin by about 0.8 points and operating margin by about 1.4 points year over year. Management expects the full-year 2026 revenue benefit from foreign exchange to trend toward approximately 100 basis points, but quarter-to-quarter currency changes can still affect ASPs, margins and reported earnings. 

ALGN Stock Estimate Trend

The Zacks Consensus Estimate for Align Technology’s 2026 earnings per share (EPS) has remained constant at $11.31 in the past 30 days.

The Zacks Consensus Estimate for 2026 revenues is pegged at 4.17 billion. This suggests a 3.3% rise from the year-ago reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Veracyte VCYT, Globus Medical GMED and Teleflex TFX.

Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 28.2% against the industry’s 3.8% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%. 

VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Globus Medical, sporting a Zacks Rank #1, has an earnings yield of 6.7% against the industry’s negative 1.4% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 27.3% against the industry’s 3.8% drop over the past year.

Teleflex, carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 14.5% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX shares have gained 4% against the industry’s 3.7% decline over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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