Align Technology (NASDAQ:ALGN) Sees Strong Trading Volume After 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) saw unusually-high trading volume on Friday after an insider bought additional shares in the company. Approximately 2,688,984 shares were traded during 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 acquired 7,576 shares of the stock in a transaction on Friday, August 1st. The stock was acquired at an average price of $131.49 per share, with a total value of $996,168.24. Following the completion of the transaction, the chief executive officer 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 filing with the SEC, which can be accessed through this hyperlink.

Wall Street Analyst Weigh In

Several equities analysts have commented on ALGN shares. UBS Group lowered their price objective on Align Technology from $240.00 to $215.00 and set a "neutral" rating for the company in a research report on Thursday, April 24th. Hsbc Global Res lowered Align Technology from a "strong-buy" rating to a "hold" rating in a research report on Friday, April 25th. Needham & Company LLC reissued a "hold" rating on shares of Align Technology in a research report on Thursday, May 1st. Piper Sandler lowered their price objective on Align Technology from $250.00 to $190.00 and set an "overweight" rating for the company in a research report on Thursday. Finally, Mizuho set a $210.00 price objective on Align Technology in a research report on Thursday. One research analyst has rated the stock with a sell rating, five have given a hold rating, nine have assigned a buy rating and one has assigned a strong buy rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average price target of $215.00.

Align Technology Stock Performance

The stock has a 50-day simple moving average of $187.04 and a two-hundred day simple moving average of $185.39. The firm has a market cap of $9.90 billion, a PE ratio of 23.02, a price-to-earnings-growth ratio of 1.44 and a beta of 1.61.

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 return on equity of 13.36% and a net margin of 11.04%. The business had revenue of $1.01 billion during the quarter, compared to analysts' expectations of $1.06 billion. During the same period last year, the firm posted $2.41 EPS. Align Technology's quarterly revenue was down 1.6% compared to the same quarter last year. As a group, sell-side analysts anticipate that Align Technology, Inc. will post 7.98 EPS for the current fiscal year.

Align Technology declared that its Board of Directors has authorized a share buyback program on Tuesday, May 6th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the medical equipment provider to reacquire up to 7.9% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's board believes its shares are undervalued.

Hedge Funds Weigh In On Align Technology

A number of hedge funds have recently bought and sold shares of the business. Redmond Asset Management LLC raised its position in Align Technology by 69.3% in the 2nd quarter. Redmond Asset Management LLC now owns 4,689 shares of the medical equipment provider's stock worth $888,000 after buying an additional 1,920 shares during the last quarter. Mizuho Markets Cayman LP grew its stake in shares of Align Technology by 7.7% during the 2nd quarter. Mizuho Markets Cayman LP now owns 1,396 shares of the medical equipment provider's stock valued at $264,000 after purchasing an additional 100 shares during the period. Motley Fool Asset Management LLC bought a new stake in shares of Align Technology during the 2nd quarter valued at about $224,000. Fjarde AP Fonden Fourth Swedish National Pension Fund grew its stake in shares of Align Technology by 9.5% during the 2nd quarter. Fjarde AP Fonden Fourth Swedish National Pension Fund now owns 12,708 shares of the medical equipment provider's stock valued at $2,406,000 after purchasing an additional 1,100 shares during the period. Finally, Teacher Retirement System of Texas grew its stake in shares of Align Technology by 2.0% during the 2nd quarter. Teacher Retirement System of Texas now owns 10,571 shares of the medical equipment provider's stock valued at $2,001,000 after purchasing an additional 203 shares during the period. Hedge funds and other institutional investors own 88.43% of the company's stock.

About Align Technology

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.