An improving market backdrop could send shares of Align Technology higher, according to Wells Fargo. The bank initiated coverage on the medical device company with an overweight rating and set its price target at $255, which reflects more than 24% upside from Thursday’s close. “We acknowledge that the Dental/Clear Aligner market isn’t exactly out of the woods yet given underlying macro factors,” analyst Vik Chopra wrote in a Friday note to clients. “However, we like ALGN’s wide competitive moat and with the stock trading at a significant discount to its historical averages, we think shares offer a compelling risk/reward balance here.” “Given the large discount to its 3- and 5-year average vs. peers, we see ALGN as best positioned for a rebound when the market does turn,” the analyst continued. While Chopra noted that the U.S. clear aligner space is flat as a result of factors like inflation and interest rates, Align Technology’s leadership could set up the company for “long-term, durable” growth, he said. Align holds about two-thirds market share, Chopra added. He anticipates that the company will grow faster than the market in 2025, just as it did in 2024, when its revenue growth was 3.5% compared to the market’s 2.6% growth. Chopra also pointed to Align’s “large” opportunity with teens, given that the company offers products targeting that demographic and invests in educating the group about Invisalign aligners through social media. “We estimate that ALGN’s penetration of the teen market is just 5-6%, resulting in a multi-year runway for growth and a large [total addressable market],” the analyst also said. A majority of analysts are similarly bullish. Out of the 17 analysts covering Align, 10 have a strong buy or buy rating, per LSEG. On the other hand, five have taken a neutral view of the stock. It also has a consensus target for the next 12 months of around $258, reflecting more than 26% upside potential. This comes as the stock has had a rough past year, plunging more than 32% in the last 12 months. Shares were nearly 1% higher in the premarket Friday following Chopra’s move.
