10 Worst Performing Healthcare Stocks in 2024

7. Align Technology, Inc. (NASDAQ:ALGN)

Total YTD Return: -21.16% 

Align Technology, Inc. (NASDAQ:ALGN) is a medical device company that specializes in orthodontic and dental solutions, primarily known for its Invisalign system—a series of clear plastic aligners that straighten teeth as an alternative to traditional metal braces. The company also produces intraoral scanners, like the iTero line, used by dentists and orthodontists to create 3D digital impressions of patients’ teeth.

Align Technology, Inc. (NASDAQ:ALGN) has invested significantly in research and development, recently launching the Palatal Expander system—a 3D-printed orthodontic device designed to widen the upper arch in growing patients. This system has received positive feedback from doctors and patients and is expected to drive significant growth for the company.

In the third quarter of 2024, Align Technology, Inc. (NASDAQ:ALGN) reported total revenues of $977.9 million, a modest increase of 1.8% year-over-year. However, this growth was overshadowed by a 5.4% sequential decline in Clear Aligner revenues, which totaled $786.8 million. The company’s diluted net income per share was $1.55, down from $1.59 in the same quarter last year. Notably, foreign exchange fluctuations negatively impacted revenues by approximately $14.6 million year-over-year.

Align Technology, Inc. (NASDAQ:ALGN)’s operating income for Q3 2024 was $162.3 million, translating to an operating margin of 16.6% (non-GAAP operating margin of 22.1%). The decline in profitability is concerning, especially given that operating expenses rose significantly, with selling, general, and administrative costs increasing to $434.1 million compared to $408 million in Q3 2023. This increase in costs, coupled with declining revenues from their core product line, has raised alarms about the company’s ability to maintain profitability. Moreover, ALGN has declined by more than 21% since the start of 2024, which makes it one of the worst performing healthcare stocks.

As tracked by the Insider Monkey database, 50 hedge fund holders held shares in Align Technology, Inc. (NASDAQ:ALGN) in Q3 2024, with Citadel Investment Group being the largest stakeholder owning shares worth $394.5 million.