Valued at a market cap of $9.4 billion, Align Technology, Inc. (ALGN) is a global medical device company based in Tempe, Arizona. It is known for its Invisalign clear aligners, used for orthodontic treatment, and iTero intraoral scanners, which support digital dentistry and restorative workflows. 

Companies valued at $2 billion or more are typically classified as “mid-cap stocks,” and ALGN fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the medical instruments & supplies industry. The company specializes in digital dentistry, combining 3D imaging, AI-driven treatment planning, and precision manufacturing through its Invisalign system and iTero scanners. This enables it to deliver patients a more aesthetically pleasing, comfortable alternative to braces, while equipping providers with digital workflows that enhance accuracy, efficiency, and outcomes.

Despite its notable strength, this healthcare company has dipped 50.8% from its 52-week high of $262.87, reached on Sep. 18, 2024. Moreover, shares of ALGN have declined 26.1% over the past three months, considerably underperforming the SPDR S&P Health Care Equipment ETF’s (XHE) marginal gain during the same time frame.

In the longer term, ALGN has fallen 48.9% over the past 52 weeks, significantly lagging behind XHE's 11.3% downtick over the same time period. Moreover, on a YTD basis, shares of ALGN are down 37.9%, compared to XHE’s 9.9% drop.

To confirm its bearish trend, ALGN has been trading below its 200-day moving average over the past year, with slight fluctuations, and has remained below its 50-day moving average since late July.

On Jul. 30, ALGN delivered weaker-than-expected Q2 results, and its shares crashed 36.6% in the following trading session. Due to a 3.3% drop in its clear aligner revenues, its top line fell 1.6% year-over-year to $1 billion, missing consensus estimates by 4.7%. Moreover, while its adjusted EPS increased 3.3% from the same period last year to $2.49, it fell short of analyst expectations by 3.1%. 

ALGN has outpaced its rival, DENTSPLY SIRONA Inc.’s (XRAY) 49.7% decline over the past 52 weeks. However, it has lagged behind XRAY’s 29.2% loss on a YTD basis. 

Despite ALGN’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 14 analysts covering it, and the mean price target of $186.33 suggests a 44% premium to its current price levels.