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Align Technology Banks on Global Growth, Competition Rife

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On Feb 1, we issued an updated research report on Align Technology, Inc. (ALGN - Free Report) . The stock carries a Zacks Rank #3 (Hold).

Notably, Align Technology manufactures and markets clear aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and manufacturing) digital services used in dentistry, orthodontics and dental records storage.

Shares of the company have been trading above its industry over the last year. The stock has rallied 158.8% compared with the industry’s 16.7% growth. The company delivered an encouraging performance in the fourth quarter of 2017, posting better-than-expected earnings and revenues.

 

We are encouraged by the company’s solid Invisalign Technology prospects and growth in North America and internationally, particularly in Asia Pacific. The company has witnessed year-over-year growth in both the segments. Also, expansion in gross and operating margin buoys optimism.

We are also upbeat about the company’s distribution agreement with Glidewell Dental to distribute the iTero Element intraoral scanning system with the latest glidewell.io In-Office Solution in North America.

On the flip side, adverse foreign exchange translation continues to raise concerns for Align Technology’s international operations. Also, escalating costs and expenses are weighing on margins. Moreover, a tough competitive landscape and other macroeconomic headwinds pose a threat.

Key Picks

Some better-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , ResMed (RMD - Free Report) and PerkinElmer .

Bio-Rad Laboratories has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The company has a long-term expected earnings growth rate of 25%.

ResMed has a Zacks Rank #2. The company has a long-term expected earnings growth rate of 13%.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

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