It has been about a month since the last earnings report for Align Technology (ALGN Quick QuoteALGN - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Align Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

ALGN Q2 Earnings and Revenues Miss Estimates

Align Technology delivered second-quarter 2025 adjusted earnings per share of $2.49, up 3.3% from the year-ago level. However, the reported figure missed the Zacks Consensus Estimate by 3.1%.

GAAP earnings per share for the quarter was $1.72, reflecting a rise of 43.4% from $1.28 in the comparable period of 2024.

Q2 Revenues

The top line decreased 1.6% year over year to $1.01 billion, and missed the Zacks Consensus Estimate by 4.6%.

Segments in Detail

The company has two reportable segments — Clear Aligner, and Imaging Systems and CAD/CAM Services (Systems and Services).

Revenues in the Clear Aligner segment fell 3.3% year over year to $804.6 million.

Clear Aligner revenues experienced a 0.6% year-over-year favorable foreign exchange impact.

Revenues from Imaging Systems & CAD/CAM Services rose 5.6% to $207.8 million in the reported quarter. The segment, too, witnessed a favorable currency impact of 0.5% year over year.

Q2 Margins

Gross profit in the second quarter was $708.1 million, down 2% year over year. The gross margin contracted 32 basis points (bps) year over year to 69.9% despite a decrease of 0.5% in the cost of net revenues.

SG&A expenses fell 0.8% to $448.7 million, while R&D expenses rose 4.6% to $96.4 million.

Operating income totaled $163 million, down 8.5% year over year. The operating margin contracted 122 bps to 16.1%.

Financial Details

The company exited the second quarter with cash and cash equivalents of $901.2 million compared with $873 million at the end of the first quarter.

The net cash provided by operating activities was $181.3 million compared with $188.5 million at the end of the second quarter of 2024.

Stock Repurchase

During the reported quarter, the company repurchased approximately 585.1 thousand shares of common stock at an average price of $164.14 per share, completing the $225.0 million open market repurchase initiated in the first quarter of 2025. This marked the completion of the $1.0 billion stock repurchase program, approved in January 2023, in its entirety.

In April 2025, its board of directors authorized a plan to repurchase up to $1.0 billion of common stock, expected to be completed over a period of up to three years.

Outlook

Align Technology provided its sales outlook for full-year 2025. It has also provided guidance for the third quarter of 2025.

For the full year, ALGN expects Clear Aligner revenue growth to be flat to slightly up from 2024, assuming foreign exchange at current spot rates. Systems and Services revenues are anticipated to grow faster than Clear Aligner revenues. The Zacks Consensus Estimate for 2025 revenues is pegged at $4.16 billion, suggesting 3.9% growth year over year.

The 2025 GAAP gross margin for the full year is expected to be 67-68%. The GAAP operating margin is anticipated to range between 13% and 14%.

To support continued expansion, the company expects to invest $100-$125 million in capital expenditures, primarily related to technology upgrades as well as maintenance.

For the third quarter, ALGN anticipates worldwide revenues to be in the band of $965-$985 million. The Zacks Consensus Estimate is pegged at $1.04 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -15.84% due to these changes.

VGM Scores

At this time, Align Technology has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Align Technology has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Align Technology belongs to the Zacks Medical - Dental Supplies industry. Another stock from the same industry, West Pharmaceutical Services (WST Quick QuoteWST - Free Report) , has gained 2.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

West Pharmaceutical reported revenues of $766.5 million in the last reported quarter, representing a year-over-year change of +9.2%. EPS of $1.84 for the same period compares with $1.52 a year ago.

West Pharmaceutical is expected to post earnings of $1.67 per share for the current quarter, representing a year-over-year change of -9.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.6%.

West Pharmaceutical has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.