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Align Technology (ALGN) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Align Technology (ALGN - Free Report) closed at $602.01, marking a -0.61% move from the previous day. This change lagged the S&P 500's 1.64% gain on the day. At the same time, the Dow added 1.08%, and the tech-heavy Nasdaq gained 0.45%.

Heading into today, shares of the maker of the Invisalign tooth-straightening system had lost 12.09% over the past month, lagging the Medical sector's loss of 3.43% and the S&P 500's loss of 0.83% in that time.

Align Technology will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.67, up 2.3% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.02 billion, up 22.23% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.10 per share and revenue of $3.94 billion. These totals would mark changes of +111.43% and +59.45%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Align Technology. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Align Technology currently has a Zacks Rank of #3 (Hold).

Investors should also note Align Technology's current valuation metrics, including its Forward P/E ratio of 54.55. This valuation marks a premium compared to its industry's average Forward P/E of 19.98.

Also, we should mention that ALGN has a PEG ratio of 2.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Dental Supplies was holding an average PEG ratio of 1.51 at yesterday's closing price.

The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 111, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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