Why Is Align Technology (ALGN) Up 9.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Align Technology (ALGN). Shares have added about 9.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Align Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.ALGN Q2 Earnings and Revenues Miss EstimatesAlign Technology delivered second-quarter 2025 adjusted earnings per share of $2.49, up 3.3% from the year-ago level. However, the reported figure missed the Zacks Consensus Estimate by 3.1%.GAAP earnings per share for the quarter was $1.72, reflecting a rise of 43.4% from $1.28 in the comparable period of 2024.Q2 RevenuesThe top line decreased 1.6% year over year to $1.01 billion, and missed the Zacks Consensus Estimate by 4.6%.Segments in DetailThe company has two reportable segments — Clear Aligner, and Imaging Systems and CAD/CAM Services (Systems and Services).Revenues in the Clear Aligner segment fell 3.3% year over year to $804.6 million.Clear Aligner revenues experienced a 0.6% year-over-year favorable foreign exchange impact.Revenues from Imaging Systems & CAD/CAM Services rose 5.6% to $207.8 million in the reported quarter. The segment, too, witnessed a favorable currency impact of 0.5% year over year.Q2 MarginsGross profit in the second quarter was $708.1 million, down 2% year over year. The gross margin contracted 32 basis points (bps) year over year to 69.9% despite a decrease of 0.5% in the cost of net revenues.SG&A expenses fell 0.8% to $448.7 million, while R&D expenses rose 4.6% to $96.4 million.Operating income totaled $163 million, down 8.5% year over year. The operating margin contracted 122 bps to 16.1%.Financial DetailsThe company exited the second quarter with cash and cash equivalents of $901.2 million compared with $873 million at the end of the first quarter.The net cash provided by operating activities was $181.3 million compared with $188.5 million at the end of the second quarter of 2024.Stock RepurchaseDuring the reported quarter, the company repurchased approximately 585.1 thousand shares of common stock at an average price of $164.14 per share, completing the $225.0 million open market repurchase initiated in the first quarter of 2025. This marked the completion of the $1.0 billion stock repurchase program, approved in January 2023, in its entirety.In April 2025, its board of directors authorized a plan to repurchase up to $1.0 billion of common stock, expected to be completed over a period of up to three years.OutlookAlign Technology provided its sales outlook for full-year 2025. It has also provided guidance for the third quarter of 2025.For the full year, ALGN expects Clear Aligner revenue growth to be flat to slightly up from 2024, assuming foreign exchange at current spot rates. Systems and Services revenues are anticipated to grow faster than Clear Aligner revenues. The Zacks Consensus Estimate for 2025 revenues is pegged at $4.16 billion, suggesting 3.9% growth year over year.The 2025 GAAP gross margin for the full year is expected to be 67-68%. The GAAP operating margin is anticipated to range between 13% and 14%.To support continued expansion, the company expects to invest $100-$125 million in capital expenditures, primarily related to technology upgrades as well as maintenance.For the third quarter, ALGN anticipates worldwide revenues to be in the band of $965-$985 million. The Zacks Consensus Estimate is pegged at $1.04 billion.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.The consensus estimate has shifted -15.84% due to these changes.VGM ScoresAt this time, Align Technology has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Align Technology has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.Performance of an Industry PlayerAlign Technology belongs to the Zacks Medical - Dental Supplies industry. Another stock from the same industry, West Pharmaceutical Services (WST), has gained 2.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.West Pharmaceutical reported revenues of $766.5 million in the last reported quarter, representing a year-over-year change of +9.2%. EPS of $1.84 for the same period compares with $1.52 a year ago.West Pharmaceutical is expected to post earnings of $1.67 per share for the current quarter, representing a year-over-year change of -9.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.West Pharmaceutical has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Align Technology, Inc. (ALGN): Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks