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Align Technology Inc ALGN

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Morningstar’s Analysis

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Align Reports Another Stellar Quarter, Yet Still No Detailed Guidance; Raising FVE to $259

Soo Romanoff Equity Analyst

Analyst Note

| Soo Romanoff |

No-moat Align Technology reported another very strong quarter, with revenue of $834 million, a 28% increase from the prior year with record liner and iTero scanners sales and impressive international growth. Top-line growth continues to be boosted by investments in virtual and digital training as well as notable promotional marketing to address the many people working from home with more time for self-care. These investments also targeted general practitioners (in addition to orthodontists) who are likely drawn by the potential to expand their scope of services along with revenue. Despite the upbeat discussion, we do not view these levels to be sustainable for the foreseeable future, as implied by the current share price. Further, high unemployment and economic softness could also prove to be a headwind for this elective procedure. We have increased our fair value estimate to $259 from $175 to reflect the robust near-term growth. However, this is significantly below the most recent closing price of $546 per share.

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Company Profile

Business Description

Align Technology is a medical (dental) device company primarily known for the Invisalign system, which is an alternative to traditional braces to correct a wide range of malocclusions. The company also manufactures intraoral scanners and computer-aided design/computer-aided manufacture digital services to support the customization of these liners. Historically, only orthodontists serviced this product, but more recently the company has expanded its direct marketing efforts to include generalists (dentists) and consumers.

410 North Scottsdale Road, Suite 1300
Tempe, AZ, 85281
T +1 408 470-1000
Sector Healthcare
Industry Medical Devices
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 18,070