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Align Technology, Inc. (ALGN - Free Report) delivered fourth-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.42, up 39.9% from the year-ago earnings. The reported figure topped the Zacks Consensus Estimate by 11%.
GAAP EPS for the quarter was $1.64 compared with 54 cents in the same period last year.
Full-year adjusted EPS was $8.61, an increase of 11% from the year-ago period. The same surpassed the Zacks Consensus Estimate by 3%.
Revenues
Revenues increased 6.1% year over year to $956.7 million in the quarter and exceeded the Zacks Consensus Estimate by 3%. Moreover, revenues were favorably impacted by the foreign exchange of approximately $13.8 million year over year.
At the constant exchange rate or CER, total revenues in the fourth quarter were up 1.3% year over year.
Align Technology, Inc. Price, Consensus and EPS Surprise
For 2023, revenues were $3.86 billion, up 3.4% from 2022. The figure exceeded the Zacks Consensus Estimate by 0.8%.
Segments in Detail
The company has two reportable segments —Clear Aligner and Imaging Systems and CAD/CAM Services (Systems and Services)
Revenues in the Clear Aligner segment were up 6.9% year over year to $781.9 million. The growth is attributed to higher average selling prices and non-case revenues, partially offset by lower volumes.
Revenues were favorably impacted by a foreign exchange of approximately $12 million (or 1.6%) year over year. Total Clear Aligner shipments during the quarter amounted to 592,635, down 0.6% year over year.
Revenues from Imaging Systems & CAD/CAM Services were up 2.9% to $174.8 million in the quarter. Revenues witnessed a favorable currency impact of 1.1% year over year.
Margins
The gross profit in the fourth quarter was $669.5 million, reflecting an increase of 8.4% year over year. The gross margin in the quarter under review expanded 146 basis points (bps) year over year to 70.0% despite an increase of 1.2% in the cost of net revenues.
During the quarter, SG&A expenses decreased 1.8% to $402.5 million, while R&D expenses fell 1.6% to $82.2 million.
The operating income in the quarter under review was $184.9 million, highlighting an increase of 48.9%. The operating margin expanded 556 bps to 19.3%.
Financial Details
Align Technology exited the fourth quarter of 2023 with cash and cash equivalents of $937.4 million compared with $1.23 billion recorded at the end of the third quarter.
The cumulative net cash provided by operating activities at the end of the fourth quarter was $785.8 million, sequentially up from $738.9 million at the end of the third quarter of 2023.
Currently, $650 million is available for repurchases under ALGN’s $1 billion Stock Repurchase Program, which was authorized in the first quarter of 2023 to succeed the 2021 $1 billion program.
Full-Year Guidance
Align Technology initiated a financial outlook for 2024.
For the full year, ALGN anticipates revenues to be up in the mid-single digits than 2023. The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $4.06 billion.
Both GAAP and adjusted operating margins for the full year are anticipated to be slightly above the 2023 GAAP and adjusted operating margins, respectively. The company expects to invest approximately $100 million in capital expenditures, primarily related to building construction and improvements and manufacturing capacity to support continued expansion.
For the first quarter of 2024, ALGN anticipates worldwide revenues in the range of $960 million-$980 million. The Zacks Consensus Estimate is pegged at $973.2 million.
Our Take
Align Technology exited the fourth quarter of 2023 with better-than-expected earnings and revenues. The performance reflected strength in Clear Aligner volumes for teens and international doctors as well as continued growth in Invisalign touch-up cases under the Invisalign Doctor Subscription Program. During the quarter, the company gained FDA clearance for the commercial availability of the Invisalign Palatal Expander System in the United States.
Concurrently with the earnings announcement, ALGN unveiled the new iTero Lumina intraoral scanner, featuring a three times wider field of capture in a 50% smaller wand that delivers faster scanning, higher accuracy and superior visualization for greater practice efficiency. The company is dedicated to delivering on its strategic growth drivers of international expansion, patient demand, orthodontist utilization and GP dentist treatment to extend its leadership in digital orthodontics and dentistry.
Meanwhile, Clear Aligner volumes were down on a year-over-year basis for the Americas and the EMEA regions.
Zacks Rank and Key Picks
Align Technology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Haemonetics (HAE - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 10.9% for 2025. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Haemonetics, carrying a Zacks Rank #2, reported a second-quarter fiscal 2024 adjusted EPS of 99 cents, which beat the Zacks Consensus Estimate by 5.3%. For the third quarter, revenues are expected to increase 5.6% year over year.
HAE has an estimated fiscal 2024 earnings growth rate of 28.4% compared with the industry’s 17.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 16.1%.
Cardinal Health reported a first-quarter fiscal 2024 adjusted earnings of $1.73, which beat the Zacks Consensus Estimate by 23.6%. For the second quarter, revenues are expected to increase 10.4% year over year. It currently sports a Zacks Rank #1.
CAH has an estimated long-term earnings growth rate of 15.3% compared with the industry’s 12.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.7%.
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Align Technology (ALGN) Q4 Revenues Top, Margins Expand
Align Technology, Inc. (ALGN - Free Report) delivered fourth-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.42, up 39.9% from the year-ago earnings. The reported figure topped the Zacks Consensus Estimate by 11%.
GAAP EPS for the quarter was $1.64 compared with 54 cents in the same period last year.
Full-year adjusted EPS was $8.61, an increase of 11% from the year-ago period. The same surpassed the Zacks Consensus Estimate by 3%.
Revenues
Revenues increased 6.1% year over year to $956.7 million in the quarter and exceeded the Zacks Consensus Estimate by 3%. Moreover, revenues were favorably impacted by the foreign exchange of approximately $13.8 million year over year.
At the constant exchange rate or CER, total revenues in the fourth quarter were up 1.3% year over year.
Align Technology, Inc. Price, Consensus and EPS Surprise
Align Technology, Inc. price-consensus-eps-surprise-chart | Align Technology, Inc. Quote
For 2023, revenues were $3.86 billion, up 3.4% from 2022. The figure exceeded the Zacks Consensus Estimate by 0.8%.
Segments in Detail
The company has two reportable segments —Clear Aligner and Imaging Systems and CAD/CAM Services (Systems and Services)
Revenues in the Clear Aligner segment were up 6.9% year over year to $781.9 million. The growth is attributed to higher average selling prices and non-case revenues, partially offset by lower volumes.
Revenues were favorably impacted by a foreign exchange of approximately $12 million (or 1.6%) year over year. Total Clear Aligner shipments during the quarter amounted to 592,635, down 0.6% year over year.
Revenues from Imaging Systems & CAD/CAM Services were up 2.9% to $174.8 million in the quarter. Revenues witnessed a favorable currency impact of 1.1% year over year.
Margins
The gross profit in the fourth quarter was $669.5 million, reflecting an increase of 8.4% year over year. The gross margin in the quarter under review expanded 146 basis points (bps) year over year to 70.0% despite an increase of 1.2% in the cost of net revenues.
During the quarter, SG&A expenses decreased 1.8% to $402.5 million, while R&D expenses fell 1.6% to $82.2 million.
The operating income in the quarter under review was $184.9 million, highlighting an increase of 48.9%. The operating margin expanded 556 bps to 19.3%.
Financial Details
Align Technology exited the fourth quarter of 2023 with cash and cash equivalents of $937.4 million compared with $1.23 billion recorded at the end of the third quarter.
The cumulative net cash provided by operating activities at the end of the fourth quarter was $785.8 million, sequentially up from $738.9 million at the end of the third quarter of 2023.
Currently, $650 million is available for repurchases under ALGN’s $1 billion Stock Repurchase Program, which was authorized in the first quarter of 2023 to succeed the 2021 $1 billion program.
Full-Year Guidance
Align Technology initiated a financial outlook for 2024.
For the full year, ALGN anticipates revenues to be up in the mid-single digits than 2023. The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $4.06 billion.
Both GAAP and adjusted operating margins for the full year are anticipated to be slightly above the 2023 GAAP and adjusted operating margins, respectively. The company expects to invest approximately $100 million in capital expenditures, primarily related to building construction and improvements and manufacturing capacity to support continued expansion.
For the first quarter of 2024, ALGN anticipates worldwide revenues in the range of $960 million-$980 million. The Zacks Consensus Estimate is pegged at $973.2 million.
Our Take
Align Technology exited the fourth quarter of 2023 with better-than-expected earnings and revenues. The performance reflected strength in Clear Aligner volumes for teens and international doctors as well as continued growth in Invisalign touch-up cases under the Invisalign Doctor Subscription Program. During the quarter, the company gained FDA clearance for the commercial availability of the Invisalign Palatal Expander System in the United States.
Concurrently with the earnings announcement, ALGN unveiled the new iTero Lumina intraoral scanner, featuring a three times wider field of capture in a 50% smaller wand that delivers faster scanning, higher accuracy and superior visualization for greater practice efficiency. The company is dedicated to delivering on its strategic growth drivers of international expansion, patient demand, orthodontist utilization and GP dentist treatment to extend its leadership in digital orthodontics and dentistry.
Meanwhile, Clear Aligner volumes were down on a year-over-year basis for the Americas and the EMEA regions.
Zacks Rank and Key Picks
Align Technology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Haemonetics (HAE - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 10.9% for 2025. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Haemonetics, carrying a Zacks Rank #2, reported a second-quarter fiscal 2024 adjusted EPS of 99 cents, which beat the Zacks Consensus Estimate by 5.3%. For the third quarter, revenues are expected to increase 5.6% year over year.
HAE has an estimated fiscal 2024 earnings growth rate of 28.4% compared with the industry’s 17.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 16.1%.
Cardinal Health reported a first-quarter fiscal 2024 adjusted earnings of $1.73, which beat the Zacks Consensus Estimate by 23.6%. For the second quarter, revenues are expected to increase 10.4% year over year. It currently sports a Zacks Rank #1.
CAH has an estimated long-term earnings growth rate of 15.3% compared with the industry’s 12.3% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.7%.