It has been about a month since the last earnings report for Align Technology (ALGN Quick QuoteALGN - Free Report) . Shares have lost about 0% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent trend continue leading up to its next earnings release, or is Align Technology due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Align Technology, Inc. before we dive into how investors and analysts have reacted as of late.

ALGN Earnings and Revenues Beat, Margins Down

Align Technology, Inc. (ALGN Quick QuoteALGN - Free Report) delivered fourth-quarter 2025 adjusted earnings per share (EPS) of $3.29, up 34.8% from the year-ago level. The bottom line surpassed the Zacks Consensus Estimate by 10.1%.

GAAP EPS for the quarter was $1.89, up 35.9% year over year.

Full-year adjusted EPS was $10.51, reflecting a 12.6% increase from the 2024 level. The figure surpassed the Zacks Consensus Estimate by 2.8%

ALGN’s Revenues

The top line increased 5.3% year over year to $1.05 billion and beat the Zacks Consensus Estimate by 1.33%. Foreign exchange favorably impacted total revenues by approximately 1.4% year over year.

Full-year revenues totaled $4.03 billion, up 0.9% from the 2024 level. The figure topped the Zacks Consensus Estimate by 0.2%.

ALGN’s 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 were up 5.5% year over year to $838.1 million. This was supported by a record Clear Aligner volume of 676.9 thousand cases, which were 7.7% higher than the year-ago period. Revenues also experienced a 1.5% year-over-year favorable foreign exchange impact.

Imaging Systems & CAD/CAM Services revenues increased 4.2% to $209.4 million in the reported quarter, driven by higher volumes across all regions, and continued adoption of the iTero lumina scanner. The segment, too, witnessed a favorable currency impact of 1.2% year over year.

ALGN’s Q4 Margins

Gross profit in the fourth quarter was $683.6 million, down 1.9% year over year. The gross margin contracted 477 basis points (bps) year over year to 65.3% due to a 22% increase in the cost of net revenues.

SG&A expenses rose 3.9% to $441.7 million, while R&D expenses fell 12.5% to $83 million.

Operating income totaled $158.9 million, down 10.3% year over year. The operating margin contracted 263 bps to 15.2%.

Financial Details of ALGN

The company exited the fourth quarter with cash and cash equivalents of $1.09 billion compared with $1.04 billion at the end of 2024.

Cumulative net cash provided by operating activities was $593.2 million compared with $738.2 million at the end of 2024.

ALGN’s Repurchase Activity

During the reported quarter, the company repurchased approximately 0.7 million shares of common stock at an average price of $142.87 per share. The repurchases were executed under the $200.0 million open-market program announced on Aug. 5, 2025, and concluded in January 2026.

As of Dec. 31, 2025, $831.2 million remained available for repurchases of common stock under the $1.0 billion stock repurchase program, announced in April 2025.

ALGN’s 2026 Outlook

Align Technology issued guidance for full-year 2026, assuming no external factors beyond its control, including FX, macroeconomic conditions and changes to current tariffs or duties.

The company expects worldwide revenue growth to be up 3-4% year over year. 2026 Clear Aligner volume growth is projected to increase in the mid-single digits year over year. The Zacks Consensus Estimate for the company’s revenues is pegged at $4.18 billion, suggesting 3.8% growth year over year.

Non-GAAP operating margin is expected to improve 100 bps year over year to approximately 23.7%. CapEx investment is forecasted between $125 million and $150 million.

For the first quarter, ALGN anticipates worldwide revenues to be in the range of $1.010-$1.030 billion, up 3-5% year over year. The Zacks Consensus Estimate for the metric is pegged at $1.02 billion, calling for a 3.9% increase.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Align Technology has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. 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. Interestingly, Align Technology has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Align Technology is part of the Zacks Medical - Dental Supplies industry. Over the past month, Conmed (CNMD Quick QuoteCNMD - Free Report) , a stock from the same industry, has gained 1.8%. The company reported its results for the quarter ended December 2025 more than a month ago.

Conmed reported revenues of $373.2 million in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $1.43 for the same period compares with $1.34 a year ago.

For the current quarter, Conmed is expected to post earnings of $0.82 per share, indicating a change of -13.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Conmed. Also, the stock has a VGM Score of A.