Align Technology (ALGN) Gains From New Alliances, Global Growth

Align Technology’s ALGN robust product line, consistent focus on international markets and strategic alliances bolster our confidence in the stock. The stock carries a Zacks Rank #2 (Buy) currently.

Align Technology is strategically capturing the growing malocclusion market, one of the most prevalent clinical dental conditions in the world. According to Align Technology’s May 2023 data, the condition currently affects approximately 60% to 75% of the global population. The company estimates that there are approximately 500 million people globally with malocclusion.

In the first quarter of 2024, among major milestones, Align Technology acquired Cubicure, a leader in direct 3D printing solutions. This acquisition is the foundation for the company’s next-generation aligner manufacturing. The company also launched the iTero Lumina intraoral scanner, its next generation of digital scanning technology and the Invisalign Palatal Expander (IPE) system in the United States and Canada. It has also received regulatory approval for the Invisalign Palatal Expander in Australia and New Zealand.

In the teen market, nearly 200,000 teens and younger patients started treatment with Invisalign Clear Aligners in the first quarter, up 5.8% year over year, reflecting strength in APAC and EMEA. Teen starts were up 1.2% sequentially, reflecting strength in the EMEA and North America.

Further, Align Technology is expanding its sales and marketing by reaching new countries and regions, including new areas within Africa and Latin America. Till 2022, the company sold directly or through authorized distributors in more than 100 countries. With the opening of its third clear aligner fabrication facility in Wroclaw, Poland, the company now has a manufacturing facility in each of its operating territories — Americas (Mexico), APAC (China) and EMEA (Poland).

Align Technology, Inc. Price

Align Technology, Inc. Price

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

The company also performs digital treatment planning and interpretation for restorative cases worldwide, including in Costa Rica, China, Germany, Spain, Poland, and Japan, among others. Align Technology continues to expand its business through investments in resources, infrastructure and initiatives that help drive growth in Invisalign treatment, intraoral scanners and Exocad CAD/CAM software in existing and new international markets.

According to the company, by establishing and expanding its key operational activities in locations closer to customers, it can address local and regional needs in a better way. Among the recent international updates, effective Jan 1, 2024, the company announced a 5% global price increase for some Invisalign products across most markets. Invisalign Comprehensive Three and Three is currently available in North America and in certain markets in EMEA and APAC was recently launched in France and in the Middle East.

Align Technology's strategic alliances look impressive. The company has well-established relationships with many Dental Support Organizations (DSO), especially in the United States, and is continuously exploring collaborations with others that drive the adoption of digital dentistry.

In the United States, Align Technology is focused on reaching young adults as well as teens and their parents through famous athletes, influencers and fashion designers, including Mazz Crosby, OverTime Megan and Kristin Juszczyk. According to the company, these partnerships are creating a compelling brand activation at the Super Bowl.

On the flip side, the ongoing industry-wide trend of staffing shortages and supply chain-related hazards is denting growth. Deteriorating international trade, with global inflationary pressure leading to a tough situation related to raw material and labor costs, as well as freight charges and rising interest rates, have put the dental treatment space (which is highly elective) in a tight spot. Added to this, Align Technology is also concerned about the military conflict between Russia and Ukraine that is likely to continue.

The company noted earlier that while it continues to employ research and development personnel in Russia as well as limited post-sales support and administrative personnel, its total number of employees in Russia was materially reduced in 2022 and a similar trend was seen in 2023 as well. Align Technology anticipates increasing headwinds from macroeconomic uncertainty and potential supply issues related to the war in the Middle East in the upcoming period.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Hims & Hers Health HIMS, Medpace MEDP and ResMed RMD, presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Hims & Hers Heath stock has surged 131.3% in the past year. Estimates for the company’s earnings have remained constant at 18 cents for 2024 and increased 3.1% to 33 cents for 2025 in the past 30 days.

HIMS’ earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 79.2%. In the last reported quarter, it posted an earnings surprise of a staggering 150%.

Estimates for Medpace’s 2024 earnings per share have moved up to $11.29 from $11.23 in the past 30 days. Shares of the company have surged 84% in the past year compared with the industry’s 4.7% growth.

MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.8%. In the last reported quarter, it delivered an earnings surprise of 30.6%.

Estimates for ResMed’s fiscal 2024 earnings per share have moved to $7.70 from $7.64 in the past 30 days. Shares of the company have declined 1.8% in the past year against the industry’s rise of 4.9%.

RMD’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%. In the last reported quarter, it delivered an earnings surprise of 10.9%.

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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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