Align Technology (ALGN 0.84%) stock -- the company behind Invisalign braces -- jumped 8% through 10:40 a.m. ET Thursday after beating on both top and bottom lines last night.
Heading into the company's Q3 report, analysts forecast $2.41 per share in adjusted profit and $976.3 million in revenue. Align earned $2.61 per share (also adjusted), and its sales hit $995.7 million.
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Align Technology Q3 earnings
The quarter wasn't quite as good as that sounds. Align beat on sales and exceeded its own expectations. Still, sales grew less than 2% year over year, and they declined sequentially -- and it seems most of the increase was explained by favorable foreign exchange rates.
Still, with Align stock down 35% over the past year, I suspect investors will take good news wherever they can find it.
On earnings, as noted above, the $2.61-per-share profit was non-GAAP (adjusted). Earnings as calculated according to generally accepted accounting principles (GAAP) reveal only a $0.78 profit, and free cash flow (FCF) appears down significantly. While Align didn't specify capital spending data, which would be needed to calculate FCF fully, operating cash flow for the first nine months of 2025 is only $370 million -- an 18% decline.
NASDAQ: ALGN
Key Data Points
Is Align stock a buy?
What does all this mean for investors? Align is a $10.2 billion stock with only $378 million in trailing profit and $540 million in trailing free cash flow. That works out to a price-to-earnings ratio of 27 but a price-to-free-cash-flow ratio of less than 18.9.
Those aren't bad numbers if the company can return to double-digit growth. For now, however, most analysts polled by S&P Global Market Intelligence see 10% long-term growth as more likely -- and earnings are currently still falling. Align stock looks like a sell to me.
