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Align Technology (ALGN) to Post Q2 Earnings: What's in Store?
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Align Technology, Inc. (ALGN - Free Report) is set to release second-quarter 2023 results on Apr 26 after the closing bell.
The company posted adjusted earnings per share (EPS) of $1.82 in the last reported quarter, which surpassed the Zacks Consensus Estimate by 7.69%. Align Technology beat earnings estimates in two of the trailing four quarters and missed the same on other two occasions, the average negative surprise being 5.65%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Clear Aligner Business
Similar to the first quarter, ALGN is likely to have witnessed stability across all regions for the Clear Aligner business and the favorable average selling price. Revenues from non-case products are expected to have been driven by the continued growth from the Invisalign Doctors Subscription Program (“DSP”) and the Vivera Retainers in commerce sales, which include everything from a liner case to whitening and cleaning products.
Align Technology had success rolling out its new subscription-based program, DSP, which increased sequentially and year over year in the last reported quarter. The growth momentum in non-case revenues is likely to have been sustained, as the company continues to expand DSP offerings in other regions.
In the last reported quarter, clear aligner case volumes reflected increased shipments across markets in Japan, Korea and India, while China posted volume improvements. Further, ALGN introduced the Invisalign Comprehensive three and three product in most markets. Initial customer uptake was favorable, which signals a more meaningful impact in the coming quarters. We believe all these trends are likely to have aided the company’s sales growth in the second quarter.
Coming to the teen market segment, Clear Aligner cases for teenagers are expected to show an improvement banking on increased submitters in the Asia-Pacific and Americas region. The EMEA is expected to have witnessed the increased utilization of Invisalign Teen case starts and the recent introduction of Invisalign moderate in the second quarter.
Of late, Align Technology is focusing on gaining a share from traditional metal prices through teen-specific sales and marketing programs and product features, including Invisalign First for kids as young as six. This rose sequentially and year over year across all regions in the last reported quarter. For the second quarter also, these developments are likely to have benefited the company’s top line.
Our model projects ALGN’s Clear Aligner revenues for the second quarter to have improved 2.5% year over year to $818.5 million.
Imaging Systems & CAD/CAM Service Business
In the last reported quarter, Align Technology registered both a sequential and year-over-year decline in the segment’s revenues. Poor scanner volumes this time too might mar second-quarter sales growth within this segment.
However, non-system scanner revenues might register year-over-year growth banking primarily on increased scanner rentals and upgrades and certified pre-owned leasing programs.
In the last reported quarter, scanner services’ year-over-year revenue growth was strong due to increased subscription revenues, driven by the growth of the installed base of iTero scanners. We anticipate this development to have continued in the second quarter, advancing business performance.
Meanwhile, the unfavorable impact of foreign exchange might have once again dented the segment’s revenues in the second quarter. Per our model, Systems & Service business revenues for the second quarter suggest a 3.6% decline year over year to $164.9 million.
Amid macroeconomic uncertainty, the company is committed to making investments to penetrate a huge untapped market opportunity for digital orthodontics and restorative dentistry. This includes strategic investments in sales, marketing, technology and innovation. Per the company’s management, the new technologies and innovations will revolutionize ALGN’s existing offerings in ways in which doctors and their patients experience orthodontic treatment.
Q2 Estimates
The Zacks Consensus Estimate for Align Technology’s second-quarter 2023 revenues is pegged at $987.7 million, suggesting growth of 1.8% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter EPS of $2.02 indicates a 1% improvement from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Align Technology has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 4.48%. The Zacks Consensus Estimate for MCK’s fiscal 2024 first-quarter EPS is expected to rise 0.5% from the year-ago reported figure.
Boston Scientific (BSX - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #2. The company is scheduled to release second-quarter 2023 results on Jul 27.
BSX has an earnings yield of 3.71% compared with the industry’s 3.05%. The Zacks Consensus Estimate for Boston Scientific’s second-quarter EPS is expected to improve 11.4% from the year-ago reported figure.
AmerisourceBergen currently has an Earnings ESP of +0.86% and a Zacks Rank #2. ABC is scheduled to release third-quarter fiscal 2023 results on Aug 2.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.28%. The Zacks Consensus Estimate for ABC’s fiscal 2023 third-quarter EPS is expected to improve 5.6% from the year-ago reported figure.
Image: Bigstock
Align Technology (ALGN) to Post Q2 Earnings: What's in Store?
Align Technology, Inc. (ALGN - Free Report) is set to release second-quarter 2023 results on Apr 26 after the closing bell.
The company posted adjusted earnings per share (EPS) of $1.82 in the last reported quarter, which surpassed the Zacks Consensus Estimate by 7.69%. Align Technology beat earnings estimates in two of the trailing four quarters and missed the same on other two occasions, the average negative surprise being 5.65%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Clear Aligner Business
Similar to the first quarter, ALGN is likely to have witnessed stability across all regions for the Clear Aligner business and the favorable average selling price. Revenues from non-case products are expected to have been driven by the continued growth from the Invisalign Doctors Subscription Program (“DSP”) and the Vivera Retainers in commerce sales, which include everything from a liner case to whitening and cleaning products.
Align Technology had success rolling out its new subscription-based program, DSP, which increased sequentially and year over year in the last reported quarter. The growth momentum in non-case revenues is likely to have been sustained, as the company continues to expand DSP offerings in other regions.
In the last reported quarter, clear aligner case volumes reflected increased shipments across markets in Japan, Korea and India, while China posted volume improvements. Further, ALGN introduced the Invisalign Comprehensive three and three product in most markets. Initial customer uptake was favorable, which signals a more meaningful impact in the coming quarters. We believe all these trends are likely to have aided the company’s sales growth in the second quarter.
Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote
Coming to the teen market segment, Clear Aligner cases for teenagers are expected to show an improvement banking on increased submitters in the Asia-Pacific and Americas region. The EMEA is expected to have witnessed the increased utilization of Invisalign Teen case starts and the recent introduction of Invisalign moderate in the second quarter.
Of late, Align Technology is focusing on gaining a share from traditional metal prices through teen-specific sales and marketing programs and product features, including Invisalign First for kids as young as six. This rose sequentially and year over year across all regions in the last reported quarter. For the second quarter also, these developments are likely to have benefited the company’s top line.
Our model projects ALGN’s Clear Aligner revenues for the second quarter to have improved 2.5% year over year to $818.5 million.
Imaging Systems & CAD/CAM Service Business
In the last reported quarter, Align Technology registered both a sequential and year-over-year decline in the segment’s revenues. Poor scanner volumes this time too might mar second-quarter sales growth within this segment.
However, non-system scanner revenues might register year-over-year growth banking primarily on increased scanner rentals and upgrades and certified pre-owned leasing programs.
In the last reported quarter, scanner services’ year-over-year revenue growth was strong due to increased subscription revenues, driven by the growth of the installed base of iTero scanners. We anticipate this development to have continued in the second quarter, advancing business performance.
Meanwhile, the unfavorable impact of foreign exchange might have once again dented the segment’s revenues in the second quarter. Per our model, Systems & Service business revenues for the second quarter suggest a 3.6% decline year over year to $164.9 million.
Amid macroeconomic uncertainty, the company is committed to making investments to penetrate a huge untapped market opportunity for digital orthodontics and restorative dentistry. This includes strategic investments in sales, marketing, technology and innovation. Per the company’s management, the new technologies and innovations will revolutionize ALGN’s existing offerings in ways in which doctors and their patients experience orthodontic treatment.
Q2 Estimates
The Zacks Consensus Estimate for Align Technology’s second-quarter 2023 revenues is pegged at $987.7 million, suggesting growth of 1.8% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter EPS of $2.02 indicates a 1% improvement from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Align Technology has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
Mckesson (MCK - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank #2. The company will release first-quarter fiscal 2024 results on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 4.48%. The Zacks Consensus Estimate for MCK’s fiscal 2024 first-quarter EPS is expected to rise 0.5% from the year-ago reported figure.
Boston Scientific (BSX - Free Report) has an Earnings ESP of +0.47% and a Zacks Rank #2. The company is scheduled to release second-quarter 2023 results on Jul 27.
BSX has an earnings yield of 3.71% compared with the industry’s 3.05%. The Zacks Consensus Estimate for Boston Scientific’s second-quarter EPS is expected to improve 11.4% from the year-ago reported figure.
AmerisourceBergen currently has an Earnings ESP of +0.86% and a Zacks Rank #2. ABC is scheduled to release third-quarter fiscal 2023 results on Aug 2.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 19.28%. The Zacks Consensus Estimate for ABC’s fiscal 2023 third-quarter EPS is expected to improve 5.6% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.