BUZZ - Weakening demand causes Align stock to decline; brokers downgrade rating to "market perform"

October 5 - ** Align Technology (ALGN.O) shares fell 3% in pre-market trading to $139.45

** Brokerage Evercore ISI downgraded ALGN’s rating from “outperform” to “in line with the market”

** The brokerage stated that a “weaker consumer environment”, demand indicators in September “slowed sharply”, and potential adverse impacts from volume-based procurement (VBP) in China in 2027 have led them to adopt a “more cautious outlook on Align’s earnings prospects”

** VBP (volume-based procurement) is a national-level bulk procurement program in China

** Evercore added that the dental market “has weakened significantly in the third quarter” and noted both consumer confidence and expectations have declined

** The deterioration of consumer conditions may have begun to affect demand for Invisalign, with Evercore ISI stating that the worsening in September “increased the risk that the deterioration in consumer conditions is starting to reflect in Invisalign demand”

** Invisalign is Align’s core business, expected to contribute approximately $3.2 billion to the company’s total revenue of $4 billion in 2025

** The brokerage noted that signs of Align turning profitable internally (link) “have begun to emerge”, but a weak consumer environment and headwinds from VBP make this process “more difficult”

** As of the close of the previous trading day, the stock has fallen about 8% so far this year

(To facilitate non-native English speakers, Reuters has automated its reports into several other languages. As automated translation may contain errors or may lack necessary context, Reuters does not guarantee the accuracy of automated translation texts and provides them solely for the convenience of readers. Reuters accepts no liability for any damage or loss arising from the use of the automated translation feature.)