Align Tech Straightening Out

Align Technology, Inc. (ALGN - Analyst Report), founded in 1997, is engaged in the design, manufacture, and marketing of Invisalign, a proprietary system for treating malocclusion, or crooked teeth. The Invisalign product has two components, ClinCheck and Aligners. Aligners are thin, clear-plastic, removable dental appliances that are manufactured in a series to correspond to each two-week stage of the Internet-based ClinCheck simulation.

Reiterating Hold rating. We believe a difficult U.S. economy and higher marketing expenses will hamper top-line growth and margins. Strong international growth and foreign exchange gains will help offset this.

In the near-term, we think earnings quality could become an issue as management finds it difficult to meet growth targets. Meaningful earnings growth will be pushed out FY10.

Rajarshi Maulik contributed to this report.

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