Align Earnings: New Equipment, Stable Demand, and Strong Volume Make for a Solid Quarter

Narrow-moat Align Technology reported first-quarter results that were slightly higher than our expectations. Total sales were up 5.8% year over year thanks to strong systems and services performance as well as solid clear aligner volume. Management raised its full-year revenue growth outlook to 6%-8% from the midsingle digits. We think the updated guidance bakes in higher-than-expected services and new systems performance and slightly raised expectations for the clear aligner business. After adjusting our full-year expectations and accounting for time value of money, we've raised our fair value estimate to $320 per share from $316.