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It has been about a month since the last earnings report for Align Technology (ALGN - Free Report) . Shares have lost about 8.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Align Technology due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

ALGN Q2 Earnings and Revenues Beat, Margins RiseAlign Technology reported second-quarter 2026 non-GAAP earnings of $2.64 per share, up 6.0% year over year. The figure beat the Zacks Consensus Estimate by 3.1%. Revenues increased 4.3% to $1.06 billion and topped the consensus mark by 0.4%.

ALGN’s Clear Aligner Business Drives GrowthClear Aligner revenues increased 8.2% year over year to $870.9 million. This growth reflected higher shipment volumes, price increases, lower net deferrals and favorable foreign exchange. These gains were partly offset by higher discounts and a mix shift toward lower-priced products and countries.

Shipments to orthodontists and general practitioner dentists rose 7.8% and 6.6%, respectively. A record 89,200 doctors submitted Invisalign cases, while doctor utilization increased 3.8% year over year. International momentum was led by double-digit growth across EMEA and APAC, along with record second-quarter shipments in Latin America. 

ALGN’s Systems Revenues Face Pricing PressureImaging Systems and CAD/CAM Services revenues declined 10.8% year over year to $185.3 million. Persistent softness in the capital equipment market and a shift toward lower-priced scanners, rentals and leasing programs weighed on reported revenues.

However, scanner unit placements increased by double digits, with placements to new doctors reaching a record. The active scanner installed base grew approximately 11%, while restorative, wellness and orthodontic scans increased 16% to more than 12.4 million. Exocad revenues also posted double-digit growth. 

Align’s Margins Expand Despite Higher ExpensesThe second-quarter gross margin expanded 180 basis points year over year to 71.7%, driven by operational efficiencies, a tariff refund and higher Clear Aligner average selling prices. Non-GAAP gross margin also increased 180 basis points to 72.3%.

Operating expenses rose 10.7% to $603.4 million, mainly due to a U.K. value-added tax accrual and higher employee compensation. GAAP operating margin contracted 150 basis points to 14.6%, while non-GAAP operating margin expanded 160 basis points to 22.9%. 

ALGN Boosts Cash Flow and Repurchase PlansAlign ended the second quarter with $1.10 billion in cash and cash equivalents, up from $1.06 billion at the end of the first quarter. Operating cash flow totaled $192.8 million, while free cash flow amounted to $157.1 million after capital expenditures of $35.7 million.

The company repurchased roughly 393,400 shares for $67 million during the quarter. Management increased its 2026 repurchase commitment to $400-$500 million. ALGN had $733.3 million remaining under its existing $1 billion authorization at quarter-end. 

Align Sets Q3 View and Reaffirms 2026 OutlookFor the third quarter of 2026, Align expects worldwide revenues of $1.00-$1.02 billion. The Zacks Consensus Estimate for revenues is currently pegged at $1.01 billion, implying 1.4% growth.

For 2026, management continues to expect worldwide revenue growth of 3-4%. Clear Aligner volume is now projected to increase approximately 6%, while average selling prices are expected to be flat to slightly lower year over year. The Zacks Consensus Estimate for 2026 revenues is currently pinned at $4.17 billion, projecting 3.3% growth.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.

VGM ScoresCurrently, Align Technology has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Align Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry PlayerAlign Technology belongs to the Zacks Medical - Dental Supplies industry. Another stock from the same industry, West Pharmaceutical Services (WST - Free Report) , has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

West Pharmaceutical reported revenues of $872.3 million in the last reported quarter, representing a year-over-year change of +13.8%. EPS of $2.37 for the same period compares with $1.84 a year ago.

For the current quarter, West Pharmaceutical is expected to post earnings of $2.18 per share, indicating a change of +11.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for West Pharmaceutical. Also, the stock has a VGM Score of F.

Align Technology (ALGN - Free Report) came out with quarterly earnings of $2.64 per share, beating the Zacks Consensus Estimate of $2.56 per share. This compares to earnings of $2.49 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +3.13%. A quarter ago, it was expected that this maker of the Invisalign tooth-straightening system would post earnings of $2.26 per share when it actually produced earnings of $2.58, delivering a surprise of +14.16%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Align Technology, which belongs to the Zacks Medical - Dental Supplies industry, posted revenues of $1.06 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.43%. This compares to year-ago revenues of $1.01 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Align Technology shares have added about 12.5% since the beginning of the year versus the S&P 500's gain of 8.5%.

What's Next for Align Technology?While Align Technology has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Align Technology was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.88 on $1.02 billion in revenues for the coming quarter and $11.36 on $4.19 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Dental Supplies is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

McKesson (MCK - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5.

This prescription drug distributor is expected to post quarterly earnings of $9.59 per share in its upcoming report, which represents a year-over-year change of +16.1%. The consensus EPS estimate for the quarter has been revised 0.2% higher over the last 30 days to the current level.

McKesson's revenues are expected to be $104.39 billion, up 6.7% from the year-ago quarter.

Key Takeaways ALGN is set to report Q2 2026 results on July 29, with revenues expected to grow 3.9% year over year. ALGN's Clear Aligner segment is expected to benefit from higher volumes across regions and patient groups.Align Technology's digital tools, scanner adoption and ART pilot may support second-quarter revenue growth. Align Technology, Inc. (ALGN - Free Report) is set to release second-quarter 2026 results on July 29, after the closing bell.

In the last reported quarter, the company posted adjusted earnings per share (EPS) of $2.58, which surpassed the Zacks Consensus Estimate by 14.16%. Align Technology beat on earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 7.80%.

ALGN’s Q2 EstimatesThe Zacks Consensus Estimate for revenues is pegged at $1.05 billion, which suggests 3.9% growth from the year-ago reported figure.

The Zacks Consensus Estimate for earnings is pinned at $2.56 per share, which implies a 2.8% rise from the year-ago recorded actuals.

Estimate Revision Trend Ahead of ALGN’s Q2 EarningsEstimates for second-quarter earnings have remained unchanged at $2.56 per share in the past 30 days.

Here’s a brief overview of the company’s performance leading up to this announcement.

Factors Shaping ALGN’s Q2 PerformanceClear Aligner

The segment is likely to have benefited from higher Clear Aligner volumes, with particular strength across the EMEA, APAC and Latin America, with continued stability in North America. Both orthodontists and GP dentist channels may have seen volume growth, driven by growth across adults, teens and growing kids. From a product standpoint, it is likely to have seen strong contributions from Invisalign First and the Invisalign Palatal Expander with Mandibular Advancement with Occlusal Blocks. 

Dental and orthodontic service organizations (DSOs) must have remained a key, scalable growth channel in the to-be-reported quarter, with continued strong progress across all major regions. Meanwhile, the doctor subscription program (DSP), which includes retention, touch-up and relapse cases, is expected to have maintained strong momentum during the quarter. 

The Zacks Consensus Estimate for Clear Aligner revenues indicates 6.3% year-over-year growth.

Align Technology, Inc. Price and EPS SurpriseImaging Systems & CAD/CAM Services (Systems and Services)

Within this segment, revenues are likely to have benefited from higher volumes across all regions and continued adoption of iTero Lumina scanner. In the first quarter, the total installed base of active scanners exceeded 125,000 globally. We expect this trend to have continued in the to-be-reported quarter as well. 

exocad achieved strong revenue growth, reinforcing the company’s strategy to integrate orthodontics and restorative dentistry within a customer and patient-centric digital platform. We expect this trend to have persisted in the second quarter as well. Following the successful launch of Invisalign Advanced Restorative Treatment (ART) pilot in the EMEA, Align recently began an Invisalign ART pilot in the United States with labs and doctors beginning training in several markets. We expect the development to have contributed to the company’s top-line growth. 

The company’s growing suite of digital diagnostic tools, including Align Oral Health Suite and Align X-ray Insights, helps doctors identify conditions earlier and deliver clearer, more informed treatment recommendations. We expect all these tools to have positively impacted Align Technology’s revenues in the second quarter.

The Zacks Consensus Estimate for the segment’s revenues implies a decrease of 5.5% on a year-over-year basis.

What Our Quantitative Model Predicts for ALGNPer our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, this is not the case here, as you can see below:

Earnings ESP: Align Technology has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a LookHere are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time around:

Hinge Health Inc. (HNGE - Free Report) has an Earnings ESP of +4.24% and a Zacks Rank #1. The company is expected to release second-quarter 2026 results soon.

In the trailing four quarters, HINGE delivered an average surprise of 179.54%. The Zacks Consensus Estimate for second-quarter EPS implies a decrease of 11.9% from the year-ago quarter’s figure.

Neurocrine Biosciences (NBIX - Free Report) has an Earnings ESP of +40.60% and a Zacks Rank #1 at present. The company is expected to release second-quarter 2026 results soon.

NBIX’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 9.08%. The Zacks Consensus Estimate for the company’s second-quarter EPS calls for an increase of 112.3% from the year-ago quarter’s figure.

West Pharmaceutical Services (WST - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #2 at present. The company is slated to release second-quarter 2026 results on July 23. 

WST’s earnings beat estimates in each of the trailing four quarters, the average surprise being 19.37%. The Zacks Consensus Estimate for WST’s second-quarter EPS implies a rise of 13% from the year-ago reported figure.