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Align Technology (ALGN) to Post Q4 Earnings: What's in Store?
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Align Technology, Inc. (ALGN - Free Report) is set to release fourth-quarter 2023 results on Jan 31 after the closing bell.
The company posted adjusted earnings per share (EPS) of $2.14 in the last reported quarter, which missed the Zacks Consensus Estimate by 5.3%. Align Technology beat earnings estimates in three of the trailing four quarters and missed in one, the average negative surprise being 6.53%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Clear Aligner Business
Despite the difficult macroeconomic challenges and soft consumer trends Align Technologies continued to face throughout 2023, we expect the company to have experienced growth in its worldwide revenues in the fourth quarter of 2023, banking on an improving volume environment. The number of Clear Aligner shipments to teenage and younger patients is likely to have been robust, driven by the continued strength of Invisalign First.
In the to-be-reported quarter, non-case revenues may have witnessed a year-over-year increase owing to the sustained growth of Vivera retainers. Also, the growing adoption of ALGN’s monthly subscription-based Invisalign Doctor Subscription Program, which is currently available in the United States, Canada, Iberia and the Nordics, may have contributed to revenues. As previously stated, the company is likely to have expanded the program in the EMEA and with certain DSO (Dental Support Organizations) partners in the fourth quarter of 2023.
On a geographic basis, clear aligner volumes may have witnessed a sequential increase in Invisalign shipments from the APAC and Latin American regions, as well as North American Invisalign teenage cases. Further, in North America, the increased adoption of the Invisalign comprehensive three and three product may have driven volume growth, while Invisalign DSP touchup cases are also expected to have increased year over year. All these developments are likely to have favored ALGN’s top line in the fourth quarter of 2023.
Across the EMEA, we expect clear liner volumes to have improved in the to-be-reported quarter, implying the continued adoption of Invisalign moderate, the comprehensive three and three product and an increase in Teen Case starts, mainly due to Invisalign first and the Invisalign Teen Case packs.
Key markets within APAC, such as India, Taiwan, Korea, Japan and Thailand, are expected to have also witnessed an upward growth trend in clear aligner volumes. Improving trends in China may have also contributed. During the third quarter, the Invisalign comprehensive three and three product was well-received in APAC, and we assume this to have continued in the to-be-reported quarter as well, benefiting the company’s revenues.
Going by the Zacks Consensus Estimate, ALGN’s Clear Aligner business revenues are likely to have improved 7.4% year over year in the fourth quarter of 2023.
Imaging Systems & CAD/CAM Service Business
In the fourth quarter of 2023, the Systems & Services business is likely to have witnessed higher scanner volumes in the Americas, reflecting an increased mix of iTero 5D plus scanners, including more trade-in trade-ups for DSO customers. Further, this development is likely to have offset a weaker capital equipment cycle and lower non-systems revenues, thus positively impacting ALGN’s revenues.
In addition, the company must have reported a further increase in digital tools, such as My Invisalign Consumer and Patient app, increasing its active user base. Recently, the Invisalign Palatal Expander system secured the FDA’s 510(k) clearance, which may have boosted ALGN’s market opportunity in the teen market. Following an updated medical device license issued by Health Canada, the Invisalign Palater Expander is now available for broad patient applicability, including growing children, teens, and adults (with surgery or other techniques). These developments may have boosted the company’s financial results in the to-be-reported quarter.
Going by the Zacks Consensus Estimate, ALGN’s Systems & Services business revenues are likely to have improved 3.5% year over year in the fourth quarter of 2023.
Q4 Estimates
The Zacks Consensus Estimate for Align Technology’s fourth-quarter 2023 revenues is pegged at $928.4 million, suggesting growth of 2.9% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s fourth-quarter EPS of $2.17 indicates a 25.4% improvement from the year-ago reported figure.
What Our Model Suggests
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Align Technologies 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 #3.
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 quarter:
SiBone has a long-term expected earnings growth rate of 15.2%. SIBN surpassed earnings in each of the trailing four quarters, the average being 24.21%.
RxSight (RXST - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #2. The company is expected to release fourth-quarter 2023 results on Mar 4, 2024.
RXST has an expected long-term earnings growth rate of 21%. The company surpassed earnings in each of the trailing four quarters, the average being 18.25%.
Masimo (MASI - Free Report) currently has an Earnings ESP of +10.72% and a Zacks Rank #2. The company is expected to release its fourth-quarter 2023 results on Feb 27, 2024.
MASI has an earnings yield of 2.69% against the industry’s -5.04%. In the last reported quarter, the company delivered an earnings surprise of 6.78%.
Image: Bigstock
Align Technology (ALGN) to Post Q4 Earnings: What's in Store?
Align Technology, Inc. (ALGN - Free Report) is set to release fourth-quarter 2023 results on Jan 31 after the closing bell.
The company posted adjusted earnings per share (EPS) of $2.14 in the last reported quarter, which missed the Zacks Consensus Estimate by 5.3%. Align Technology beat earnings estimates in three of the trailing four quarters and missed in one, the average negative surprise being 6.53%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Clear Aligner Business
Despite the difficult macroeconomic challenges and soft consumer trends Align Technologies continued to face throughout 2023, we expect the company to have experienced growth in its worldwide revenues in the fourth quarter of 2023, banking on an improving volume environment. The number of Clear Aligner shipments to teenage and younger patients is likely to have been robust, driven by the continued strength of Invisalign First.
In the to-be-reported quarter, non-case revenues may have witnessed a year-over-year increase owing to the sustained growth of Vivera retainers. Also, the growing adoption of ALGN’s monthly subscription-based Invisalign Doctor Subscription Program, which is currently available in the United States, Canada, Iberia and the Nordics, may have contributed to revenues. As previously stated, the company is likely to have expanded the program in the EMEA and with certain DSO (Dental Support Organizations) partners in the fourth quarter of 2023.
Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote
On a geographic basis, clear aligner volumes may have witnessed a sequential increase in Invisalign shipments from the APAC and Latin American regions, as well as North American Invisalign teenage cases. Further, in North America, the increased adoption of the Invisalign comprehensive three and three product may have driven volume growth, while Invisalign DSP touchup cases are also expected to have increased year over year. All these developments are likely to have favored ALGN’s top line in the fourth quarter of 2023.
Across the EMEA, we expect clear liner volumes to have improved in the to-be-reported quarter, implying the continued adoption of Invisalign moderate, the comprehensive three and three product and an increase in Teen Case starts, mainly due to Invisalign first and the Invisalign Teen Case packs.
Key markets within APAC, such as India, Taiwan, Korea, Japan and Thailand, are expected to have also witnessed an upward growth trend in clear aligner volumes. Improving trends in China may have also contributed. During the third quarter, the Invisalign comprehensive three and three product was well-received in APAC, and we assume this to have continued in the to-be-reported quarter as well, benefiting the company’s revenues.
Going by the Zacks Consensus Estimate, ALGN’s Clear Aligner business revenues are likely to have improved 7.4% year over year in the fourth quarter of 2023.
Imaging Systems & CAD/CAM Service Business
In the fourth quarter of 2023, the Systems & Services business is likely to have witnessed higher scanner volumes in the Americas, reflecting an increased mix of iTero 5D plus scanners, including more trade-in trade-ups for DSO customers. Further, this development is likely to have offset a weaker capital equipment cycle and lower non-systems revenues, thus positively impacting ALGN’s revenues.
In addition, the company must have reported a further increase in digital tools, such as My Invisalign Consumer and Patient app, increasing its active user base. Recently, the Invisalign Palatal Expander system secured the FDA’s 510(k) clearance, which may have boosted ALGN’s market opportunity in the teen market. Following an updated medical device license issued by Health Canada, the Invisalign Palater Expander is now available for broad patient applicability, including growing children, teens, and adults (with surgery or other techniques). These developments may have boosted the company’s financial results in the to-be-reported quarter.
Going by the Zacks Consensus Estimate, ALGN’s Systems & Services business revenues are likely to have improved 3.5% year over year in the fourth quarter of 2023.
Q4 Estimates
The Zacks Consensus Estimate for Align Technology’s fourth-quarter 2023 revenues is pegged at $928.4 million, suggesting growth of 2.9% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s fourth-quarter EPS of $2.17 indicates a 25.4% improvement from the year-ago reported figure.
What Our Model Suggests
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Align Technologies 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 #3.
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 quarter:
SiBone (SIBN - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #2. The company is expected to release fourth-quarter 2023 results on Feb 26, 2024. You can see the complete list of today’s Zacks #1 Rank stocks here.
SiBone has a long-term expected earnings growth rate of 15.2%. SIBN surpassed earnings in each of the trailing four quarters, the average being 24.21%.
RxSight (RXST - Free Report) has an Earnings ESP of +3.85% and a Zacks Rank #2. The company is expected to release fourth-quarter 2023 results on Mar 4, 2024.
RXST has an expected long-term earnings growth rate of 21%. The company surpassed earnings in each of the trailing four quarters, the average being 18.25%.
Masimo (MASI - Free Report) currently has an Earnings ESP of +10.72% and a Zacks Rank #2. The company is expected to release its fourth-quarter 2023 results on Feb 27, 2024.
MASI has an earnings yield of 2.69% against the industry’s -5.04%. In the last reported quarter, the company delivered an earnings surprise of 6.78%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.