Advertisement
New Zealand markets open in 3 hours 2 minutes
  • NZX 50

    11,699.79
    -28.31 (-0.24%)
     
  • NZD/USD

    0.6135
    +0.0013 (+0.21%)
     
  • ALL ORDS

    8,082.30
    -67.80 (-0.83%)
     
  • OIL

    80.00
    +0.77 (+0.97%)
     
  • GOLD

    2,419.80
    +34.30 (+1.44%)
     

Align Technology (ALGN) to Post Q1 Earnings: What's in Store?

Align Technology, Inc. ALGN is set to release first-quarter 2024 results on Apr 24 after the closing bell.

The company posted adjusted earnings per share (EPS) of $2.42 in the last reported quarter, which topped the Zacks Consensus Estimate by 11%. Align Technology beat earnings estimates in three of the trailing four quarters and missed in one, the average negative surprise being 5.82%.

Let’s look at how things have shaped up before this announcement.

Factors at Play

Clear Aligner Business

Similar to the last reported quarter, Align Technology is likely to have witnessed strength in Clear Aligner volumes for teens and international doctors. It is also expected to have registered continued growth from Invisalign touch-up cases, driven by the Invisalign Doctor Subscription Program.

ADVERTISEMENT

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, might have contributed to revenues.

Meanwhile, in the fourth quarter of 2023, Align Technology got FDA clearance for its Invisalign Palatal Expander System (IPE). The FDA 510(k) clearance is for broad patient applicability, including growing children, teens and adults. We believe this development to have contributed positively to the company’s top line in first-quarter 2024.

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. In North America, the increased adoption of the Invisalign comprehensive three and three product may have driven volume growth. At the same time, Invisalign DSP touch-up cases are also expected to have increased year over year. All these developments are likely to have favored ALGN’s top line in the first quarter of 2024.

Across the EMEA, we expect clear liner volumes to have registered growth in the to-be-reported quarter, driven by the continued adoption of Invisalign moderate, the comprehensive three and three product and an increase in Teen Case start, 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 fourth quarter, the Invisalign comprehensive three and three product was well-received in APAC. 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 2.7% from the year-ago reported figure in the first quarter of 2024.

Imaging Systems & CAD/CAM Service Business

In the first quarter of 2024, the Systems & Services business is likely to have witnessed growth owing to increased services, CAD/CAM and non-systems revenues, including scanner leasing and rental programs and certified preowned scanner sales.

Align Technology, Inc. Price and EPS Surprise

 

Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote

 

In the fourth quarter of 2023, the company introduced the iTero Lumina inter-oral scanner with a smaller wand with unparalleled data capture capabilities for scanning by clinical members. The iTero Lumina inter-oral scanner is available now with orthodontic workflows. According to the company, the use of iTero scanners for Invisalign case submissions continues to grow and remains a positive catalyst for Invisalign utilization. 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 6.5% from the year-ago reported figure in the first quarter of 2024.

Q1 Estimates

The Zacks Consensus Estimate for Align Technology’s first-quarter 2024 revenues is pegged at $972.4 million, suggesting growth of 3.1% from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s first-quarter EPS of $1.96 indicates a 7.7% 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 #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 quarter:

High Tide HITI has an Earnings ESP of +175.00% and a Zacks Rank #1. The company is expected to release second-quarter fiscal 2024 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.

High Tide has an expected earnings growth rate of 100% for fiscal 2024. High Tide surpassed earnings in each of the trailing four quarters, the average being 91.67%.

ShockWave Medical SWAV has an Earnings ESP of +14.51% and a Zacks Rank #2. The company is due to release first-quarter 2024 results on May 13.

SWAV has an expected long-term earnings growth rate of 27.2%. ShockWave Medical surpassed earnings in three of the trailing four quarters and missed in one, the average beat being 13.55%.

Edwards Lifesciences EW currently has an Earnings ESP of +1.68% and a Zacks Rank #2. The company is scheduled to release its first-quarter 2024 results on Apr 25.

EW has a historical long-term earnings growth rate of 9.9%. In the trailing four quarters, Edwards Lifesciences delivered an average earnings surprise of 0.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Align Technology, Inc. (ALGN) : Free Stock Analysis Report

Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report

ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report

High Tide Inc. (HITI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research