Zacks Investment Research downgraded shares of Align Technology, Inc. (ALGN) from OUTPERFORM to NEUTRAL on July 06, 2012, with a target price of $37.00.
Align witnessed balanced sales growth across all its channels banking on its core product Invisalign. Moreover, Cadent's contribution also helped Align to further penetrate the malocclusion market. Align's focus on the international market especially in Europe is encouraging. Successful launch of Invisalign G4 is expected to boost the company's revenue further. Although Align is facing gross margin compression for several quarters, the gradual pick up in patient traffic is expected to add further life to the company's overall performance. Since our Outperform recommendation two months back, shares have increased considerably and are hovering around its 52-week high level. Given its stretched valuation, we believe upward potential of the stock is limited at present and hence go back to Neutral' recommendation.
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