Align Technology (NASDAQ:ALGN) Sees Large Volume Increase on Insider Buying Activity

Key Points

• Align Technology experienced a 137% increase in trading volume on Friday, with approximately 2.7 million shares traded, leading to a price jump from $129.01 to $137.65.
• Days leading up to this surge showed a trend of analyst downgrades, with Morgan Stanley and HSBC cutting their price targets significantly, suggesting a cautious outlook.
• The company has authorized a $1 billion stock repurchase program, indicating that its board may view the stock as undervalued amidst recent performance issues.

Align Technology, Inc. (NASDAQ:ALGN - Get Free Report) shares saw an uptick in trading volume on Friday after an insider bought additional shares in the company. 2,688,984 shares were traded during mid-day trading, an increase of 137% from the previous session's volume of 1,136,373 shares.The stock last traded at $137.65 and had previously closed at $129.01.

Specifically, CEO Joseph M. Hogan purchased 7,576 shares of the stock in a transaction that occurred on Friday, August 1st. The stock was bought at an average cost of $131.49 per share, for a total transaction of $996,168.24. Following the acquisition, the chief executive officer directly owned 184,945 shares of the company's stock, valued at $24,318,418.05. This represents a 4.27% increase in their position. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link.

Analyst Upgrades and Downgrades

ALGN has been the topic of several recent analyst reports. Morgan Stanley reissued an "equal weight" rating and set a $154.00 price objective (down from $249.00) on shares of Align Technology in a research report on Thursday, July 31st. Mizuho set a $210.00 price objective on shares of Align Technology in a research note on Thursday. Needham & Company LLC restated a "hold" rating on shares of Align Technology in a report on Thursday, May 1st. Piper Sandler cut their price objective on shares of Align Technology from $250.00 to $190.00 and set an "overweight" rating on the stock in a report on Thursday, July 31st. Finally, Evercore ISI upped their price objective on Align Technology from $200.00 to $220.00 and gave the stock an "outperform" rating in a research report on Wednesday, July 9th. One research analyst has rated the stock with a sell rating, five have assigned a hold rating, nine have assigned a buy rating and one has issued a strong buy rating to the company. Based on data from MarketBeat.com, Align Technology currently has an average rating of "Moderate Buy" and an average target price of $215.00.

Align Technology Trading Up 2.7%

The company has a market capitalization of $10.26 billion, a price-to-earnings ratio of 23.71, a P/E/G ratio of 1.49 and a beta of 1.61. The stock's 50 day moving average price is $186.38 and its 200 day moving average price is $184.55.

Align Technology (NASDAQ:ALGN - Get Free Report) last issued its earnings results on Wednesday, July 30th. The medical equipment provider reported $2.49 earnings per share for the quarter, missing analysts' consensus estimates of $2.57 by ($0.08). Align Technology had a net margin of 11.04% and a return on equity of 13.36%. The company had revenue of $1.01 billion during the quarter, compared to analyst estimates of $1.06 billion. During the same quarter in the prior year, the business earned $2.41 EPS. The business's quarterly revenue was down 1.6% on a year-over-year basis. On average, research analysts expect that Align Technology, Inc. will post 7.98 earnings per share for the current year.

Align Technology announced that its board has authorized a share buyback program on Tuesday, May 6th that allows the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization allows the medical equipment provider to buy up to 7.9% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company's board of directors believes its stock is undervalued.

Institutional Investors Weigh In On Align Technology

A number of institutional investors and hedge funds have recently made changes to their positions in ALGN. iA Global Asset Management Inc. bought a new position in shares of Align Technology during the 2nd quarter valued at approximately $1,148,000. Tredje AP fonden raised its position in shares of Align Technology by 13.9% during the 2nd quarter. Tredje AP fonden now owns 131,232 shares of the medical equipment provider's stock valued at $24,846,000 after buying an additional 16,034 shares in the last quarter. Cambiar Investors LLC purchased a new position in Align Technology in the 2nd quarter worth $10,032,000. Plato Investment Management Ltd grew its holdings in Align Technology by 88.0% in the 2nd quarter. Plato Investment Management Ltd now owns 5,357 shares of the medical equipment provider's stock worth $1,011,000 after acquiring an additional 2,507 shares during the last quarter. Finally, Geneva Capital Management LLC lifted its holdings in Align Technology by 5.6% in the second quarter. Geneva Capital Management LLC now owns 31,210 shares of the medical equipment provider's stock worth $5,909,000 after buying an additional 1,654 shares during the period. Institutional investors and hedge funds own 88.43% of the company's stock.

Align Technology Company Profile

Align Technology, Inc designs, manufactures, and markets Invisalign clear aligners, and iTero intraoral scanners and services for orthodontists and general practitioner dentists in the United States, Switzerland, and internationally. The company's Clear Aligner segment offers comprehensive products, including Invisalign comprehensive package that addresses the orthodontic needs of younger patients, such as mandibular advancement, compliance indicators, and compensation for tooth eruption; and Invisalign First Phase I and Invisalign First Comprehensive Phase 2 package for younger patients generally between the ages of six and ten years, which is a mixture of primary/baby and permanent teeth.