Align Technology (ALGN)

Align Technology (ALGN - Analyst Report) is engaged in the design, manufacture, and marketing of a proprietary system, Invisalign, for the treatment of crooked teeth. The company's business fundamentals are negatively affected by the current economic turbulence.

As such, we expect revenue to decline in FY09. Furthermore, we think that the earnings quality could become an issue as management finds it difficult to meet growth targets.

We are recommending a Sell rating for this stock. We think that the shares deserve to trade at 10% discount to the comparable mean. This equates to a P/S multiple of approximately 2.0x and to a target price of $8.80.