Shares of Align Technology (ALGN -0.48%) soared in early trading on Thursday, up as much as 15%. This initial positive reaction came after the company reported financial results for the fourth quarter of 2023. However, Align Technology stock surrendered those early gains and was up less than 1% as of 11:30 a.m. ET. Here's what's going on.

Ending 2023 on a high note

Align Technology provides teeth-straightening services through its Invisalign clear aligners and through its iTero mouth-scanning devices. In Q4, the company generated net revenue of $957 million, which was up nearly 7% year over year and ahead of management's guidance of $920 million to $940 million.

Moreover, Align Technology's management guided for modest top-line growth in 2024 as well as modest improvement for its operating margin. Given its Q4 growth and its guidance for growth in the coming year, Wall Street analysts were upgrading Align stock, which likely also contributed to its early gains.

It's unclear why Align Technology stock gave back all of its early gains, but it may be as simple as traders taking some money off the table. Shares are up about 50% in only the last three months. With the catalyst from Q4 earnings in the rearview mirror, some traders may have felt like now was the time to lock in some profits.

What's next for investors?

Align Technology remains a highly profitable business, improving to an 11.5% net profit margin in 2023. With cash at its disposal, management continues doing what it's done in the past: investing in the business and returning capital to shareholders.

Regarding its business, Align Technology unveiled the newest version of iTero scanner, which is both faster and smaller than the previous iteration. It hopes this can attract more doctors to its platform and it's just one example of its investment strategy. Additionally, the company expects to spend $100 million in 2024 to support its manufacturing.

Regarding shareholders, Align Technology repurchased 1 million shares in 2023 and has $650 million in authorization remaining.

In summary, Align Technology continues to grow, profit, and make good capital allocation decisions. I believe it remains a good company for long-term investors.