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Align Technology (ALGN) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Align Technology (ALGN - Free Report) closed at $582.15, marking a -2.94% move from the previous day. This change lagged the S&P 500's daily loss of 0.67%.

In that report, analysts expect ALGN to post earnings of $2.29 per share. This would mark year-over-year growth of 754.29%. Meanwhile, our latest consensus estimate is calling for revenue of $914.22 million, up 159.49% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.50 per share and revenue of $3.78 billion. These totals would mark changes of +80.95% and +52.93%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ALGN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.95% higher. ALGN is currently a Zacks Rank #3 (Hold).

In terms of valuation, ALGN is currently trading at a Forward P/E ratio of 63.17. For comparison, its industry has an average Forward P/E of 25, which means ALGN is trading at a premium to the group.

Also, we should mention that ALGN has a PEG ratio of 2.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ALGN's industry had an average PEG ratio of 2.09 as of yesterday's close.

The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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