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Align Technology (ALGN) Gains But Lags Market: What You Should Know

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In the latest trading session, Align Technology (ALGN - Free Report) closed at $425.48, marking a +1.15% move from the previous day. This change lagged the S&P 500's 1.24% gain on the day. Elsewhere, the Dow gained 1.23%, while the tech-heavy Nasdaq added 0.15%.

Prior to today's trading, shares of the maker of the Invisalign tooth-straightening system had lost 20.09% over the past month. This has lagged the Medical sector's gain of 0.3% and the S&P 500's loss of 2.45% in that time.

Align Technology will be looking to display strength as it nears its next earnings release. On that day, Align Technology is projected to report earnings of $2.24 per share, which would represent a year-over-year decline of 10.04%. Our most recent consensus estimate is calling for quarterly revenue of $1 billion, up 11.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.75 per share and revenue of $4.78 billion, which would represent changes of +13.64% and +20.88%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Align Technology. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Align Technology currently has a Zacks Rank of #4 (Sell).

Digging into valuation, Align Technology currently has a Forward P/E ratio of 33. This represents a premium compared to its industry's average Forward P/E of 20.22.

It is also worth noting that ALGN currently has a PEG ratio of 2.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALGN's industry had an average PEG ratio of 2.31 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 108, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ALGN in the coming trading sessions, be sure to utilize Zacks.com.


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