Initiate at OP: Smile Now, Pay Later

研报英文原文证据摘录

Initiate at OP: Smile Now, Pay Later

tration as low as 5-6%. Even modest penetration gains translate EPS $11.37 $12.35

into significant incremental volume for Align.

Valuation

DSOs are accelerating digital adoption. While the North American retail channel

2025A 2026E 2027E

remains challenged, DSOs delivered double-digit 1Q 2026 volume growth across every

P/E 17.6x 16.3x 15.1xregion, demonstrating that large-scale practices are structurally committed to Align's

digital ecosystem. As DSOs continue consolidating the dental industry globally, their EV/EBITDA 10.9x 10.7x 10.2x

share of Align's volume should grow, providing a durable structural tailwind. EV/Revenue 3.1x 3.0x 2.9x

We see Elliott's involvement as a net positive, adding governance discipline QTR. EPS Q1 Q2 Q3 Q4

without disrupting the core thesis. A likely private settlement could accelerate 2025A $2.13 $2.49 $2.61 $3.29

cost optimization and capital return without derailing critical R&D investments in new 2026E $2.58a $2.63 $2.92 $3.25

product launches. The $1 billion buyback program, with ~$800 million remaining, could

2027E $3.03 $3.09 $3.02 $3.15provide meaningful EPS-accretion support and a floor under the shares.

Limited downside from China VBP. With 85%+ of ALGN's China revenue in the private

sector and VBP implementation focused on public hospitals, the bear case overstates

near-term disruption risk.

Valuation is discounted; we see a path to re-rating. Our $209 target price is

supported by a recovering orthodontic market, a structurally underpenetrated global

TAM of 600 million patients, and a multi-year margin expansion story. We see a re-

rating driven by North American retail channel stabilization, early commercial traction Our Thesis

from new products, and a constructive Elliott settlement.