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Align Technology (ALGN) to Post Q3 Earnings: What's in Store?

Align Technology, Inc. ALGN is set to report third-quarter 2021 results on Oct 27, after the closing bell.

In the last reported quarter, the company’s adjusted earnings per share of $3.04 surpassed the Zacks Consensus Estimate by 20.6%. The company beat earnings estimates in the trailing four quarters, the average negative surprise being 87.27%.

Factors to Note

Invisalign System

For the past few quarters, Align Technology has been registering impressive sales performances for Invisalign clear aligners and iTero imaging systems. This momentum is likely to have continued during the fiscal third quarter, courtesy of the resumption of practices globally. In the teen segment, the company has been experiencing improvement in Invisalign utilization and case submissions from Invisalign doctors with strong growth from North America and EMEA orthodontists due to gradual business recovery. These are likely to have contributed significantly to third-quarter revenues.

Increasing adoption of Invisalign’s Virtual Care tools amid the pandemic has been encouraging. Adoption of the Align Digital and Practice Transformation or ADAPT program is likely to have continued during the to-be-reported quarter, on account of increasing digital practice optimization. Clear Aligner shipments were robust during the last-reported quarter due to increasing customer adoption. In the past few months, the company hosted several team-focused, peer-to-peer events designed to build clinical competence in teen treatment and highlight the teen digital treatment journey with Invisalign treatment, which have garnered positive feedbacks. This trend is expected to have strongly contributed to the company’s third-quarter sales.

In July 2021, Align Technology expanded its presence in Israel with new facilities to support iTero scanner and services global operations and the adoption of digital orthodontics and restorative dentistry by furthering its industry-leading digital capabilities through iTero scanner innovation. The new product is likely to have witnessed strong costumer adoption, thus might get reflected in the third-quarter top line.

The Zacks Consensus Estimate for Invisalign System’s revenues is pegged at $814 million, suggesting an improvement of 63.8% from the year-ago reported figure.

Imaging Systems & CAD/CAM Services Business

During the last-reported quarter, Align Technology launched the Creator Center -- the new exocad one-stop-shop for online and in-person educational events. The company also expanded its market coverage with a new global OEM partner -- Ivoclar Vivadent -- one of the largest manufacturers in the dental industry. This strategic collaboration offered Align Technology’s exocad to thousands of new users worldwide. This, in turn, has likely boosted the company’s top line during the third quarter.

Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote

During the second quarter, Align Technology introduced the new iTero Workflow 2.0 software and previewed the auto-upload functionality in the iTero Element 5D Imaging System, which were rolled out regionally in all markets where the iTero Element Plus imaging systems were sold. We believe this to have full-quarter contribution in the to-be reported quarter’s top line.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $158 million, suggesting growth of 39.8% from the year-ago quarter.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $962.3 million, indicating an improvement of 31.1% from the year-ago quarter.

The same for earnings stands at $2.54 per share, suggesting a rise of 12.9%.

What Our Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here, as you can see:

Earnings ESP: Align Technology has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Henry Schein, Inc. HSIC has an Earnings ESP of +0.31% and a Zacks Rank of 2. The company will release third-quarter 2021 results on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical Services, Inc. WST has an Earnings ESP of +1.93% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Oct 28.

Insulet Corporation PODD has an Earnings ESP of +37.17% and a Zacks Rank of 2. The company will announce third-quarter 2021 results on Nov 4.


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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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