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Here's Why You Should Hold on to Align Technology (ALGN) Now
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Align Technology, Inc. (ALGN - Free Report) has been gaining from the growing market adoption of the iTero Element 5D Plus imaging system. The company’s strategic alliances also buoy optimism. However, economic uncertainty and stiff competition raise apprehension over the company.
In the past year, this Zacks Rank #3 (Hold) stock has declined 39.2% compared with the 8.2% decline of the industry and a 9.3% fall of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $23.55 billion. The company’s expected long-term earnings growth of 16%, ahead of the industry’s 11.5% rise.
Let’s delve deeper.
Key Growth Drivers
iTero in Focus: Align Technology has been focusing on expanding the workflow options of its leading iTero scanners. In the fourth quarter, Systems and Services revenues increased sequentially, driven by growth in the Americas and EMEA regions, reflecting continued sales of intraoral scanners, especially the iTero 5D. The company also announced a strategic collaboration with Desktop Metal to supply iTero Element Flex scanners to Desktop Labs. The iTero Element Flex is now the preferred restorative scanner for Desktop Labs and will connect dentists directly with a suite of offerings from Desktop Labs.
According to the company, the use of iTero scanners for Invisalign case submissions continues to grow and remains a positive catalyst for Invisalign utilization.
Strategic Alliances: Align Technology's slew of strategic alliances looks impressive. In its fourth-quarter 2022, Align Technology collaborated with Desktop Metal to supply iTero Element Flex scanners to Desktop Labs, one of the largest lab networks in the United States, serving GP dentists. Earlier to that, the company partnered with Asana, a work management platform for teams. The partnership aims to offer Invisalign-trained doctors in the United States a new workflow solution, Asana Smiles for Align. The company also noted a DSO partnership with dentalcorp — Canada's largest and fastest-growing network of dental practices.
Image Source: Zacks Investment Research
Invisalign Holds Potential: Align Technology’s Invisalign Clear Aligner has been receiving positive feedback and holds huge long-term market potential. The global Clear Aligners market size was valued at $2.31 billion in 2019 and is projected to reach $5.58 billion by 2027, at a CAGR of 18.7% (a Fortune Business Insight report).
During the fourth quarter, For the Americas, Q4 Clear Aligner volumes improved in adult patients from the GP dentist channel. For EMEA, Q4 Clear Aligner volume increased sequentially in all markets and across products, especially banking on the strong performance of the recently-launched Invisalign Moderate, iGO Plus and iGO Express. In APAC, outside of China, Q4 Clear Aligner volumes increased sequentially, led by Japan, Taiwan, India and Southeast Asia markets. On a year-over-year basis, Q4 Clear Aligner case volumes reflected increased shipments led by Korea, India, Japan, Taiwan and Vietnam.
Downsides
Competitive Landscape: Align Technology faces significant competition from traditional orthodontic appliance (or wires and brackets) players such as 3M’s Unitek, Danaher Corporation’s Sybron Dental Specialties and Dentsply International. The company also competes with products similar to Invisalign Technology, such as the products from Ormco Orthodontics, a division of Sybron Dental Specialties.
Economic Uncertainty: The general slowdown in the United States and certain international economies is having a negative impact on consumer spending and affecting Align Technology’s business fundamentals. Align Technology attributed the waning earnings to the macroeconomic crisis that affected the overall dental market and led to continued soft dental sales for Align Technology. Dental procedures are primarily elective in nature and are deferred when unemployment levels rise.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Align Technology’s 2023 earnings has moved 0.3% north to $9.78.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $3.76 billion, suggesting a 0.8% surge from the year-ago reported number.
Key Picks
Some other better-ranked stocks in the overall healthcare sector include Haemonetics Corporation (HAE - Free Report) , TerrAscend Corp. and Akerna Corp. . Haemonetics and TerrAscend both sport a Zacks Rank #1, while Akerna carries a Zack Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ stock has risen 42.1% in the past year. Earnings Estimates for Haemonetics have increased from $2.87 per share to 2.91 for 2023, and from $3.02 per share to $3.28 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 10.98%. In the last reported quarter, it reported an earnings surprise of 7.59%.
Estimates for TerrAscend in 2023 have remained constant at a loss of 10 cents per share in the past 30 days. Shares of TerrAscend have declined 70.6% in the past year.
TerrAscend’s earnings beat estimates in one of the last three quarters and missed the mark in the other two, the average negative surprise being 136.11%. In the last reported quarter, TRSSF delivered an earnings surprise of 216.67%.
Akerna’s stock declined 95.7% in the past year. Its estimates for 2023 have remained constant at a loss of $1.91 per share in the past 30 days.
Akerna missed earnings estimates in each of the last four quarters, reporting a negative earnings surprise of 15.49%, on average. In the last reported quarter, KERN delivered a negative earnings surprise of 13.33%.
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Here's Why You Should Hold on to Align Technology (ALGN) Now
Align Technology, Inc. (ALGN - Free Report) has been gaining from the growing market adoption of the iTero Element 5D Plus imaging system. The company’s strategic alliances also buoy optimism. However, economic uncertainty and stiff competition raise apprehension over the company.
In the past year, this Zacks Rank #3 (Hold) stock has declined 39.2% compared with the 8.2% decline of the industry and a 9.3% fall of the S&P 500 composite.
The renowned global medical device company has a market capitalization of $23.55 billion. The company’s expected long-term earnings growth of 16%, ahead of the industry’s 11.5% rise.
Let’s delve deeper.
Key Growth Drivers
iTero in Focus: Align Technology has been focusing on expanding the workflow options of its leading iTero scanners. In the fourth quarter, Systems and Services revenues increased sequentially, driven by growth in the Americas and EMEA regions, reflecting continued sales of intraoral scanners, especially the iTero 5D. The company also announced a strategic collaboration with Desktop Metal to supply iTero Element Flex scanners to Desktop Labs. The iTero Element Flex is now the preferred restorative scanner for Desktop Labs and will connect dentists directly with a suite of offerings from Desktop Labs.
According to the company, the use of iTero scanners for Invisalign case submissions continues to grow and remains a positive catalyst for Invisalign utilization.
Strategic Alliances: Align Technology's slew of strategic alliances looks impressive. In its fourth-quarter 2022, Align Technology collaborated with Desktop Metal to supply iTero Element Flex scanners to Desktop Labs, one of the largest lab networks in the United States, serving GP dentists. Earlier to that, the company partnered with Asana, a work management platform for teams. The partnership aims to offer Invisalign-trained doctors in the United States a new workflow solution, Asana Smiles for Align. The company also noted a DSO partnership with dentalcorp — Canada's largest and fastest-growing network of dental practices.
Invisalign Holds Potential: Align Technology’s Invisalign Clear Aligner has been receiving positive feedback and holds huge long-term market potential. The global Clear Aligners market size was valued at $2.31 billion in 2019 and is projected to reach $5.58 billion by 2027, at a CAGR of 18.7% (a Fortune Business Insight report).
During the fourth quarter, For the Americas, Q4 Clear Aligner volumes improved in adult patients from the GP dentist channel. For EMEA, Q4 Clear Aligner volume increased sequentially in all markets and across products, especially banking on the strong performance of the recently-launched Invisalign Moderate, iGO Plus and iGO Express. In APAC, outside of China, Q4 Clear Aligner volumes increased sequentially, led by Japan, Taiwan, India and Southeast Asia markets. On a year-over-year basis, Q4 Clear Aligner case volumes reflected increased shipments led by Korea, India, Japan, Taiwan and Vietnam.
Downsides
Competitive Landscape: Align Technology faces significant competition from traditional orthodontic appliance (or wires and brackets) players such as 3M’s Unitek, Danaher Corporation’s Sybron Dental Specialties and Dentsply International. The company also competes with products similar to Invisalign Technology, such as the products from Ormco Orthodontics, a division of Sybron Dental Specialties.
Economic Uncertainty: The general slowdown in the United States and certain international economies is having a negative impact on consumer spending and affecting Align Technology’s business fundamentals. Align Technology attributed the waning earnings to the macroeconomic crisis that affected the overall dental market and led to continued soft dental sales for Align Technology. Dental procedures are primarily elective in nature and are deferred when unemployment levels rise.
Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Align Technology’s 2023 earnings has moved 0.3% north to $9.78.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $3.76 billion, suggesting a 0.8% surge from the year-ago reported number.
Key Picks
Some other better-ranked stocks in the overall healthcare sector include Haemonetics Corporation (HAE - Free Report) , TerrAscend Corp. and Akerna Corp. . Haemonetics and TerrAscend both sport a Zacks Rank #1, while Akerna carries a Zack Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ stock has risen 42.1% in the past year. Earnings Estimates for Haemonetics have increased from $2.87 per share to 2.91 for 2023, and from $3.02 per share to $3.28 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 10.98%. In the last reported quarter, it reported an earnings surprise of 7.59%.
Estimates for TerrAscend in 2023 have remained constant at a loss of 10 cents per share in the past 30 days. Shares of TerrAscend have declined 70.6% in the past year.
TerrAscend’s earnings beat estimates in one of the last three quarters and missed the mark in the other two, the average negative surprise being 136.11%. In the last reported quarter, TRSSF delivered an earnings surprise of 216.67%.
Akerna’s stock declined 95.7% in the past year. Its estimates for 2023 have remained constant at a loss of $1.91 per share in the past 30 days.
Akerna missed earnings estimates in each of the last four quarters, reporting a negative earnings surprise of 15.49%, on average. In the last reported quarter, KERN delivered a negative earnings surprise of 13.33%.