Align Technology surges on record Q4 earnings, 37% EPS beat
Clear aligner volume hits 676.9K cases as company maintains 3-4% FY2026 growth outlook
Align Technology shares jumped 2.7% after the dental technology company delivered fourth-quarter earnings that blew past analyst expectations, driven by record clear aligner volume and resilient demand for its Invisalign treatment systems.
The San Jose-based company reported earnings per share of $3.29 for the fourth quarter of fiscal 2025, crushing Wall Street estimates of $2.41 and representing a 36.6% earnings surprise. Revenue reached $1.048 billion, exceeding the consensus forecast of $981.1 million by 6.8%.
"We delivered a strong finish to fiscal 2025 with record Clear Aligner case volume of 676,900 cases, up 7.7% year-over-year," the company said in its earnings announcement. "Our Q4 performance reflects healthy demand across geographic regions and continued strength in our core North America business."
The record case volume represents a significant acceleration in Align's core business, which has faced competitive pressure from cheaper alternatives and macroeconomic headwinds affecting consumer spending on elective procedures. The company's flagship Invisalign system remains the dominant clear aligner platform globally, though it faces challenges from direct-to-consumer competitors and economic sensitivity in its patient base.
Align maintained its fiscal 2026 guidance calling for 3-4% revenue growth with operating margin expansion, signaling confidence that the current momentum will continue despite broader concerns about consumer discretionary spending. The forward guidance suggests management expects growth to normalize from the fourth quarter's strength while still delivering modest top-line expansion.
Analysts remain broadly optimistic about Align's prospects, with an average price target of $183.87 representing roughly 14% upside from current levels. The consensus rating distribution shows 9 analysts recommending buy or strong buy, 8 suggesting hold, and just 1 advocating sell or strong sell, according to market data.
The strong fourth-quarter performance comes after a challenging period for the dental technology sector. Align's stock has traded in a 52-week range of $122 to $232.20, reflecting volatility around concerns about slowing case volume growth and competition. At current levels, shares trade at 31.8 times trailing earnings and 15.2 times forward estimates, indicating that the market expects multiple compression if growth remains in the low single digits.
Beyond Invisalign, Align's iTero digital scanning business continues to be a critical component of the company's strategy, providing recurring revenue from scanner sales and subscription services. The digital workflow integration between iTero scanners and Invisalign treatment planning creates a competitive moat that helps defend market share against emerging rivals.
Looking ahead, investors will focus on whether Align can sustain its case volume growth and expand operating margins as guided. The company's ability to navigate competitive pressures while maintaining premium pricing for its proprietary systems will be key to achieving the modest growth targets set for fiscal 2026.
Align Technology's market capitalization stands at approximately $11.9 billion, with institutional investors owning 96.3% of outstanding shares. The stock's beta of 1.83 indicates higher volatility than the broader market, reflecting both the company's growth profile and sensitivity to consumer spending patterns.