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Align Up on Balanced Growth, Expansion of Invisalign Teen
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On Dec 9, 2016, we issued an updated research report on California-based AlignTechnology Inc. (ALGN - Free Report) , a developer of aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services. Currently, Align sports a Zacks Rank #1 (Strong Buy).
Over the past six months, Align broadly outperformed the Zacks categorized Medical/Dental Supplies industry with respect to share price movement. In fact, after posting better-than-expected third-quarter results, the situation improved further for the company. The stock has gained 49.63% in the past six months as against the broader industry’s loss of 8.74%.
This apart, estimate revision trend for the full-year 2016 remained extremely bullish over the past one month with 10 firms revising their estimates upward with zero downward revisions. We expect this trend to persist based on several growth drivers including the latest breakthrough – Invisalign G7 – which is successfully working to tap the huge and growing teen orthodontic market.
Geographically, the company remains successful in delivering strong sales growth in North America as well as overseas. In North America, in the last reported quarter, the company observed continued increase in utilization among its orthodontist customers. In EMEA, there was a rise in adoption of Invisalign in core markets like Spain and France. Rapid growth was observed from expansion into new markets including Eastern Europe, Benelux, and Nordic regions.
In Asia-Pacific, the company witnessed strong volume in China and Japan. Currently, Align is investing nearly $100 million in R&D and marketing to further advance the science and technology for its Invisalign brand. We expect this investment to aid the company expand its business in 2016 and beyond.
In addition, Invisalign Teen continues as the largest growth opportunity, being the prime orthodontic segment of Align on a global basis. In the teen market, the company continues to gain considerable shares. Notably, in the third quarter the company witnessed a 20.5% improvement in global Invisalign cases, displaying continued adoption of Invisalign treatment for teenagers. Specifically, over the past one year, 162,000 teenagers started treatment with Invisalign, an increase of 21% from the prior year.
However, we are concerned about the ongoing economic uncertainty, which casts a gloom on Align’s dental procedures. The competitive landscape also remains a major headwind.
Key Picks
Some other well-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1, while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 33.9% over the last one year compared with the S&P 500’s 11.6% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 23.2% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 103.2% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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Align Up on Balanced Growth, Expansion of Invisalign Teen
On Dec 9, 2016, we issued an updated research report on California-based Align Technology Inc. (ALGN - Free Report) , a developer of aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services. Currently, Align sports a Zacks Rank #1 (Strong Buy).
Over the past six months, Align broadly outperformed the Zacks categorized Medical/Dental Supplies industry with respect to share price movement. In fact, after posting better-than-expected third-quarter results, the situation improved further for the company. The stock has gained 49.63% in the past six months as against the broader industry’s loss of 8.74%.
This apart, estimate revision trend for the full-year 2016 remained extremely bullish over the past one month with 10 firms revising their estimates upward with zero downward revisions. We expect this trend to persist based on several growth drivers including the latest breakthrough – Invisalign G7 – which is successfully working to tap the huge and growing teen orthodontic market.
Geographically, the company remains successful in delivering strong sales growth in North America as well as overseas. In North America, in the last reported quarter, the company observed continued increase in utilization among its orthodontist customers. In EMEA, there was a rise in adoption of Invisalign in core markets like Spain and France. Rapid growth was observed from expansion into new markets including Eastern Europe, Benelux, and Nordic regions.
In Asia-Pacific, the company witnessed strong volume in China and Japan. Currently, Align is investing nearly $100 million in R&D and marketing to further advance the science and technology for its Invisalign brand. We expect this investment to aid the company expand its business in 2016 and beyond.
In addition, Invisalign Teen continues as the largest growth opportunity, being the prime orthodontic segment of Align on a global basis. In the teen market, the company continues to gain considerable shares. Notably, in the third quarter the company witnessed a 20.5% improvement in global Invisalign cases, displaying continued adoption of Invisalign treatment for teenagers. Specifically, over the past one year, 162,000 teenagers started treatment with Invisalign, an increase of 21% from the prior year.
However, we are concerned about the ongoing economic uncertainty, which casts a gloom on Align’s dental procedures. The competitive landscape also remains a major headwind.
Key Picks
Some other well-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1, while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 33.9% over the last one year compared with the S&P 500’s 11.6% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 23.2% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 103.2% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>