Align Rides on Volume Expansion Amid Poor Shipment Scenario

On Oct 11, we issued an updated research report on Align Technology, Inc. ALGN. The company is riding on strong product development and a consistent focus on international markets. However, the current economic unrest persists to cast a negative impact on Align Technology’s dental procedures. The stock carries a Zacks Rank #3 (Hold).

Align Technology's steady momentum in Invisalign volumes across all geographies and solid worldwide volume growth for teenage patient cases buoy optimism on the stock. A solid performance in the EMEA region and the APAC markets is also a plus.

Maintaining its last-year performance, Align Technology continued with its winning streak of delivering a sturdy Invisalign Technology volume expansion across the company’s entire customer base. Geographically, the company is witnessing strength in North America and the overseas.

In the last reported quarter, in North America, the company saw a steady widening GP Dentist customer base along with a sustained uptrend in Invisalign utilization by orthodontists. Internationally, we are encouraged by a solid performance in the EMEA and the Asia Pacific (APAC) markets. Notably, the EMEA market is the second-largest space of growth for Align Technology.

Align Technology, Inc. Price

Align Technology, Inc. Price

Align Technology, Inc. price | Align Technology, Inc. Quote


In terms of portfolio enhancement, in September 2019, Align Technology announced the commercial availability of the iTero Element 2 scanner in China. Earlier in March, the company launched a new online tool called SmileView.

Previously, Align Technology launched its latest digital treatment planning facility and education center in Madrid, Spain. The company also introduced the Invisalign First clear aligners for treatment of younger patients with early mixed dentition successively in the United States, Australia, New Zealand, Japan and the EMEA region starting July 2018.

On the flip side, Align Technology registered a dull Invisalign case shipment in China, which dragged down the entire case shipment in the second quarter of 2019. Per the company, this was due to a tough consumer environment in China. This apart, there was slower growth in young adult cases noticed in North America. Also, looking at the company’s third-quarter guidance, we expect this lackluster trend to linger over the period.

Shares of the company have underperformed its industry over the past three months. The stock has plunged 29.6%, wider than the industry's 19.2% fall.

Key Picks

A few better-ranked stocks in the broader medical space are Stryker SYK, Medtronic MDT and Hill-Rom Holdings HRC, each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth rate is expected to be 10.04%.

Medtronic’s long-term earnings growth rate is projected at 7.32%.

Hill-Rom Holdings’ long-term earnings growth rate is anticipated to be 10.01%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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