We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Align Technology (ALGN) Up 10.6% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Align Technology (ALGN - Free Report) . Shares have added about 10.6% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Align Technology Tops Q4 Earnings, Margins Up
Align delivered fourth-quarter fiscal 2023 adjusted earnings per share of $2.42, up 39.9% from the year-ago earnings. The reported figure topped the Zacks Consensus Estimate by 11%.
GAAP earnings per share for the quarter was $1.64 compared with 54 cents in the same period last year.
Full-year adjusted earnings per share 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -9.05% due to these changes.
VGM Scores
Currently, Align Technology has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Align Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Align Technology (ALGN) Up 10.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Align Technology (ALGN - Free Report) . Shares have added about 10.6% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Align Technology Tops Q4 Earnings, Margins Up
Align delivered fourth-quarter fiscal 2023 adjusted earnings per share of $2.42, up 39.9% from the year-ago earnings. The reported figure topped the Zacks Consensus Estimate by 11%.
GAAP earnings per share for the quarter was $1.64 compared with 54 cents in the same period last year.
Full-year adjusted earnings per share 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -9.05% due to these changes.
VGM Scores
Currently, Align Technology has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Align Technology has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.