Align Technology (ALGN) had a flurry of notable insider buys on 11/2 when two directors and the CEO bought shares between $188.58 and $191.21. The CEO Joseph Hogan buying 10,600 shares for nearly $2M and increasing his stake by +6% while two directors buying $200k and $285k worth of shares respectively. These followed a few buys from the CEO and a director back in May near $264/share and are the first open market purchases for an ALGN insider since August 2019. Shares are rebounding sharply back over 200 and hitting 220 on Friday with the market rally. The stock bottomed near 175 and close to the volume support from late 2019 into 2020. ALGN has filled its earnings gap from last month when it gapped lower on a missing of estimates. Shares have short term resistance at 225 and then 243 above while getting through that zone can see a breakout to 275 which is the YTD 2022 VPOC.

The $17.1B company trades at 28.1x earnings, 4.2x sales, FCF yield of 3.6% and is expected to grow revenue by +2% in FY23 after a slowdown was seen in FY22. ALGN was a victim of high valuation in 2022 as rates rising hit the growth name that saw +60% revenue growth in 2021. Last month ALGN missed earnings estimates and stated that third quarter results reflect continued macro-economic uncertainty and weaker consumer confidence, as well as a significant impact from unfavorable foreign exchange rates across all currencies that affect our operations. On a constant currency basis, total Q3 revenues were reduced by $25.1 million or 2.7% sequentially and $57.4 million or 6.1% year over year — one of the largest foreign exchange impacts we have ever experienced in one quarter. We remain confident in the execution of our strategic growth drivers despite the continuing economic headwinds. ALGN announced an accelerated buyback plan on 10/31 to repurchase $200M of common stock. Average analyst price target is at $242. Piper lowered its target to $230 from $300 but keeps an Overweight rating saying some new investors may step in on the post-earnings selloff. Stifel lowered its target to $265 from $325 and keeps a Buy rating citing comps will ease, innovation should improve, and that Align’s market share seems to be relatively resilient. Short interest is at 3.5%. Hedge fund ownership fell 1.0% last quarter. Options flows have been bullish lately into weakness and on 10/31 seeing 830 January $230/$290 call spreads bought with the $180 puts sold to open.