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Can Overall Growth Drive Align Technology (ALGN) Q2 Earnings?
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Align Technology, Inc. (ALGN - Free Report) is set to report second-quarter 2018 results on Jul 25, after market close.
Last quarter, the company posted a positive earnings surprise of 19.4%. Align Technology has outperformed the Zacks Consensus Estimate in all of the preceding four quarters, the average positive earnings surprise being 20.7%.
Let’s take a look at how things are shaping up prior to this announcement.
Invisalign System — Major Growth Driver
Similar to prior quarters, Align Technology is expected to gain from continued adoption of Invisalign Technology in the second quarter of 2018 as well. The company projects Invisalign case shipments in the band of 296,000-301,000, up 28-30% from a year ago.
The company has expanded its Invisalign clear aligner range with the latest launch of Vivera Retainers with Precision Bite Ramps. With deep bite malocclusion gradually becoming a very common orthodontic occurrence worldwide, we consider this development a major breakthrough for Align Technology with respect to customer adoption. To note, the rate of deep bite malocclusion cases is mostly high in North America and Europe, Middle East and Africa (EMEA) regions, with 45% of total patients being attributed to these regions.
Notably, the Vivera retainers with Precision Bite Ramps have been made available to Invisalign-trained providers in Asia Pacific, North America and EMEA regions. Further, the company has been focusing on driving Invisalign utilization among orthodontists.
Based on these developments, we expect top-line contributions from the Invisalign system to increase considerably in the to-be-reported quarter.
Scanner and Service Business Solid
Align Technology has been raking in strong revenues from the Scanner and Service business over the past few quarters. Moreover, the company has been seeing increased adoption of iTero scanners for Invisalign case submissions instead of PVS impressions, especially in North America, thereby driving Invisalign utilization. Management expects this trend to reflect in the company’s second-quarter results.
In a bid to strengthen this business, Align Technology recently announced the expansion of the iTero Element portfolio with the launch of iTero Element 2 and iTero Element Flex scanners in the United States and the majority of European countries, including France, Germany, Italy, Spain, and the United Kingdom.
Align Technology also announced the receipt of approval from the China Food and Drug Administration to commercialize the iTero Element intraoral scanner in China.
Thus, we expect a solid show from the Scanner and Service business in the to-be-reported quarter.
Overall, Align Technology projects EPS of $1.02-$1.06 on revenues of $460-$470 million for the second quarter of 2018. The Zacks Consensus Estimate for revenues of $469.23 million indicates a rise of 31.6% from a year ago.
What Our Quantitative Model Suggests
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.
Align Technology has an Earnings ESP of +5.20% and a Zacks Rank #1, a combination that suggests that the company is likely to beat earnings this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for earnings of $1.09 reflects a 28.2% rise on a year-over-year basis.
Other Stocks to Consider
Here are a few other medical stocks worth considering that have the right combination of elements to beat estimates this time around:
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3.
Edwards Lifesciences Corporation (EW - Free Report) has a Zacks Rank #3 and an Earnings ESP of +0.44%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Overall Growth Drive Align Technology (ALGN) Q2 Earnings?
Align Technology, Inc. (ALGN - Free Report) is set to report second-quarter 2018 results on Jul 25, after market close.
Last quarter, the company posted a positive earnings surprise of 19.4%. Align Technology has outperformed the Zacks Consensus Estimate in all of the preceding four quarters, the average positive earnings surprise being 20.7%.
Let’s take a look at how things are shaping up prior to this announcement.
Invisalign System — Major Growth Driver
Similar to prior quarters, Align Technology is expected to gain from continued adoption of Invisalign Technology in the second quarter of 2018 as well. The company projects Invisalign case shipments in the band of 296,000-301,000, up 28-30% from a year ago.
Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. Price and EPS Surprise | Align Technology, Inc. Quote
The company has expanded its Invisalign clear aligner range with the latest launch of Vivera Retainers with Precision Bite Ramps. With deep bite malocclusion gradually becoming a very common orthodontic occurrence worldwide, we consider this development a major breakthrough for Align Technology with respect to customer adoption. To note, the rate of deep bite malocclusion cases is mostly high in North America and Europe, Middle East and Africa (EMEA) regions, with 45% of total patients being attributed to these regions.
Notably, the Vivera retainers with Precision Bite Ramps have been made available to Invisalign-trained providers in Asia Pacific, North America and EMEA regions. Further, the company has been focusing on driving Invisalign utilization among orthodontists.
Based on these developments, we expect top-line contributions from the Invisalign system to increase considerably in the to-be-reported quarter.
Scanner and Service Business Solid
Align Technology has been raking in strong revenues from the Scanner and Service business over the past few quarters. Moreover, the company has been seeing increased adoption of iTero scanners for Invisalign case submissions instead of PVS impressions, especially in North America, thereby driving Invisalign utilization. Management expects this trend to reflect in the company’s second-quarter results.
In a bid to strengthen this business, Align Technology recently announced the expansion of the iTero Element portfolio with the launch of iTero Element 2 and iTero Element Flex scanners in the United States and the majority of European countries, including France, Germany, Italy, Spain, and the United Kingdom.
Align Technology also announced the receipt of approval from the China Food and Drug Administration to commercialize the iTero Element intraoral scanner in China.
Thus, we expect a solid show from the Scanner and Service business in the to-be-reported quarter.
Overall, Align Technology projects EPS of $1.02-$1.06 on revenues of $460-$470 million for the second quarter of 2018. The Zacks Consensus Estimate for revenues of $469.23 million indicates a rise of 31.6% from a year ago.
What Our Quantitative Model Suggests
Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.
Align Technology has an Earnings ESP of +5.20% and a Zacks Rank #1, a combination that suggests that the company is likely to beat earnings this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for earnings of $1.09 reflects a 28.2% rise on a year-over-year basis.
Other Stocks to Consider
Here are a few other medical stocks worth considering that have the right combination of elements to beat estimates this time around:
Baxter International Inc. (BAX - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3.
Edwards Lifesciences Corporation (EW - Free Report) has a Zacks Rank #3 and an Earnings ESP of +0.44%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>