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Align Technology (ALGN) Up 0.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Align Technology (ALGN - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Align Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Align Technology's second-quarter 2018 adjusted earnings per share (EPS) came in at $1.30, up 52.9% year over year. Earnings also came above the company’s guided range of $1.02-$1.06. The figure comfortably beat the Zacks Consensus Estimate of $1.09 as well.
Revenues
Revenues grew 37.5% year over year to $490.3 million in the quarter, surpassing the Zacks Consensus Estimate of $469.2 million. Revenues were well ahead of the company’s guided range of $460-$470 million.
Per management, the top line was driven by a 30.5% year-over-year increase in Invisalign case shipments to 302,685. The upside was supported by growth in North America and international regions on an expanded customer base and increased utilization along with solid worldwide teen case growth. Moreover, increased revenues from iTero scanner contributed majorly.
Segments in Detail
Revenues at the Clear Aligner segment (88.4% of total revenues) soared 35% year over year to $433.3 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographical regions.
In the second quarter, Invisalign case shipments amounted to 302,685, up 30.5% year over year, aided by growth across all regions as well as expansion of customer base. During the quarter, Align Technology Invisalign cases were shipped to 50,085 doctors worldwide, of which 28,280 were to North America and 21,805 to international regions.
Revenues from Scanner and Service (11.6%) improved a significant 60.9% to $57 million.
Margins
Gross margin in the quarter under review was down 140 basis points (bps) year over year to 74.6% on a 45.7% rise in cost of net revenues.
During the quarter, Align Technology witnessed a 30.2% year-over-year increase in selling, general and administrative expenses to $212.1 million and a 26.2% rise in research and development (R&D) expenses to $30.8 million. The operating margin expanded 150 bps to 25%.
Financial Details
Align Technology exited the second quarter with cash and cash equivalents and short-term marketable securities of $712.5 million, compared with $662.7 million at the end of first-quarter 2018.
In the reported quarter, Align Technology received an additional $600 million stock buy-back authorization. The company currently has approximately $100.0 million left under the April 2016 stock repurchase program.
Guidance
For the third quarter of 2018, the company projects EPS of $1.13-$1.18 on revenues of $493-$503 million. The company projects Invisalign case shipments in the band of 302,000-307,000, up 28-30% from a year ago. Meanwhile, the Zacks Consensus Estimate for second-quarter 2018 EPS is $1.18 on revenues of $499.3 million. While the earnings estimate is pegged at the high end, the estimate for revenues is within the same.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Align Technology has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Align Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Align Technology (ALGN) Up 0.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Align Technology (ALGN - Free Report) . Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Align Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Align Technology's second-quarter 2018 adjusted earnings per share (EPS) came in at $1.30, up 52.9% year over year. Earnings also came above the company’s guided range of $1.02-$1.06. The figure comfortably beat the Zacks Consensus Estimate of $1.09 as well.
Revenues
Revenues grew 37.5% year over year to $490.3 million in the quarter, surpassing the Zacks Consensus Estimate of $469.2 million. Revenues were well ahead of the company’s guided range of $460-$470 million.
Per management, the top line was driven by a 30.5% year-over-year increase in Invisalign case shipments to 302,685. The upside was supported by growth in North America and international regions on an expanded customer base and increased utilization along with solid worldwide teen case growth. Moreover, increased revenues from iTero scanner contributed majorly.
Segments in Detail
Revenues at the Clear Aligner segment (88.4% of total revenues) soared 35% year over year to $433.3 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographical regions.
In the second quarter, Invisalign case shipments amounted to 302,685, up 30.5% year over year, aided by growth across all regions as well as expansion of customer base. During the quarter, Align Technology Invisalign cases were shipped to 50,085 doctors worldwide, of which 28,280 were to North America and 21,805 to international regions.
Revenues from Scanner and Service (11.6%) improved a significant 60.9% to $57 million.
Margins
Gross margin in the quarter under review was down 140 basis points (bps) year over year to 74.6% on a 45.7% rise in cost of net revenues.
During the quarter, Align Technology witnessed a 30.2% year-over-year increase in selling, general and administrative expenses to $212.1 million and a 26.2% rise in research and development (R&D) expenses to $30.8 million. The operating margin expanded 150 bps to 25%.
Financial Details
Align Technology exited the second quarter with cash and cash equivalents and short-term marketable securities of $712.5 million, compared with $662.7 million at the end of first-quarter 2018.
In the reported quarter, Align Technology received an additional $600 million stock buy-back authorization. The company currently has approximately $100.0 million left under the April 2016 stock repurchase program.
Guidance
For the third quarter of 2018, the company projects EPS of $1.13-$1.18 on revenues of $493-$503 million. The company projects Invisalign case shipments in the band of 302,000-307,000, up 28-30% from a year ago. Meanwhile, the Zacks Consensus Estimate for second-quarter 2018 EPS is $1.18 on revenues of $499.3 million. While the earnings estimate is pegged at the high end, the estimate for revenues is within the same.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Align Technology has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Outlook
Align Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.