HSBC moved Align Technology (NASDAQ: ALGN) to a Buy rating and lifted its 12-month price target to $200 from $150 after reviewing the company’s fourth-quarter 2025 performance. Align shares were trading at $187.60 at the time of the report, having advanced 14.65% over the prior week and 34.11% across the last six months.
The upgrade follows a quarterly report in which Align posted adult aligner shipments that increased 8% year-over-year, reaching the highest shipment level since 2021. Growth in doctor-supported organizations was notably stronger, with double-digit expansion reported during the quarter.
HSBC’s model anticipates Align’s top-line growth to improve to roughly 3-4% in 2026, up from about 1% in 2025, although this still falls short of the company’s ambition for double-digit expansion. On the earnings front, the bank projects an adjusted EPS compound annual growth rate of 8-9% over the next three years, which HSBC notes aligns with consensus expectations.
Recent trailing figures indicate modest revenue momentum: revenue increased by 0.9% over the past twelve months, and analyst consensus forecasts roughly 4% revenue growth for fiscal 2026. Valuation metrics show the stock trading at a price-to-earnings ratio of 31.08, reflecting a relatively high multiple against the near-term growth outlook.
HSBC acknowledges several headwinds for Align. Average selling prices for clear aligners have been pressured by intensifying competition, and the company remains sensitive to macroeconomic conditions that can influence discretionary dental spending. Management flagged ongoing caution around consumer sentiment and patient inflow in North America.
Looking to the company’s longer-term operating profile, HSBC highlights Align’s planned roll-out of direct 3D printing in 2026 as a strategic opportunity. While the bank expects initial margin dilution tied to the transition, it projects that scale will eventually deliver higher margins through reduced waste, lower input costs, and improved operating efficiency.
Share repurchases have been a prominent part of Align’s capital allocation, with management engaging in aggressive buybacks. HSBC suggests these repurchases could be interpreted as a signal of confidence in the company’s longer-term prospects.
Align’s fourth-quarter results included an earnings-per-share (EPS) print of $3.29, topping the $2.97 expectation. Revenue also beat estimates, with $1.05 billion reported versus $1.03 billion anticipated, representing 5% year-over-year growth. Management attributed the revenue beat to balanced progress across teen and adult aligner segments and scanner product sales.
Analyst responses to the quarter were swift. Piper Sandler raised its price target to $220 while keeping an Overweight rating. Stifel also increased its price target to $210, citing a 7.7% case volume increase in the fourth quarter - the strongest quarterly case volume growth since the fourth quarter of 2021. The company reported a gross margin of 72.0% in the quarter, its best since the first quarter of 2022.
How this matters
The combination of stronger-than-expected operational metrics and explicit strategic initiatives around 3D printing has prompted several firms to revisit valuation and outlook for Align. Upgrades and higher targets from multiple brokers reflect renewed investor interest, though HSBC and others emphasize that meaningful execution will be required to convert 3D printing investments into durable margin expansion.
Conclusion
HSBC’s upgrade to Buy and the accompanying higher price target reflect a view that Align can accelerate growth modestly in 2026 and eventually realize margin benefits from direct 3D printing, despite nearer-term pressures on pricing and sensitivity to consumer demand. Recent quarterly results and subsequent analyst actions underscore a trajectory of improving operational performance, tempered by clear execution and macro risks.