The Medical group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Align Technology (ALGN) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Medical sector should help us answer this question.Align Technology is a member of our Medical group, which includes 1054 different companies and currently sits at #4 in the Zacks Sector Rank. The Zacks Sector Rank gauges the str ...

Core Insights - Align Technology is well-positioned in the malocclusion market, which affects approximately 60% to 75% of the global population, translating to around 500 million individuals [1] - The company has achieved significant milestones, including treating 17 million Invisalign patients, with 4.7 million being teens, and a total of 809,000 Clear Aligner shipments for teens, marking an 8% increase from 2022 [2] - Align Technology has launched innovative products, including the Doctor Subscription Program and received FDA clearance for the Invisalign Palatal Expander System, expanding its product offerings [3] Market Opportunities - The malocclusion market presents a substantial growth opportunity for Align Technology, particularly in increasing its share of orthodontic case starts among teens and expanding digital orthodontics for adults [2] - The company is also set to roll out the ClinCheck smile video, enhancing its digital treatment planning capabilities with AI technology [3] Challenges - The ongoing economic uncertainty and industry-wide staffing shortages are negatively impacting Align Technology's growth, compounded by rising raw material and labor costs due to global inflation [4] - The military conflict between Russia and Ukraine poses additional challenges, with potential supply issues and macroeconomic uncertainties expected to affect operations [5] - Foreign exchange fluctuations have significantly impacted revenues, with 44% of the company's revenues coming from international markets, leading to a $12.8 million adverse effect on clear aligner revenues in the fourth quarter [6][7]

It has been about a month since the last earnings report for Align Technology (ALGN) . 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, ...

Financial Performance - For the year ended December 31, 2023, Clear Aligner net revenues represented approximately 83% of worldwide net revenues, while Systems and Services net revenues accounted for 17%[11]. - The company expects inflationary pressures to continue impacting revenues and costs globally in the foreseeable future[289]. - An immediate 10% change in interest rates would not have a material adverse impact on the company's future operating results and cash flows[284]. Market Presence and Growth Opportunities - Approximately 17 million people worldwide have been treated with the Invisalign system, indicating a significant market presence[12]. - The company estimates that around 600 million people globally suffer from malocclusion, with only about 22 million seeking orthodontic treatment annually, representing a substantial growth opportunity[16]. - The share of orthodontic case starts treated with the Invisalign system is approximately 10% globally, highlighting potential for market expansion[17]. - The company aims to increase consumer awareness of the Invisalign brand among the potential 600 million patients with malocclusion[46]. Product Development and Innovation - In 2023, several new products and technologies were launched to enhance the Align Digital Platform, including the Invisalign® Palatal Expander system and the SmartForce™ attachment-free clear aligner activation feature[15]. - The Align Digital Platform aims to improve personalization of treatment planning and predictability through ongoing technological innovations[15]. - The company received 510(k) clearance for the Invisalign Palatal Expander in December 2023, marking its first direct 3D printed orthodontic device[31]. - The iTero Lumina intraoral scanner, launched in January 2024, features Multi-Direct Capture technology for improved scanning efficiency and quality[39]. - The Invisalign Outcome Simulator allows patients to visualize potential treatment results, enhancing patient engagement during consultations[40]. - Smart technology, including SmartTrack and SmartStage, enhances the precision of tooth movement in Invisalign treatments[33][35]. - Align's research and development efforts focus on digital technology innovations to enhance the Invisalign system and intraoral scanners[60]. Operational Efficiency and Manufacturing - The company continues to invest in manufacturing process improvements and automated systems to enhance production efficiency[51]. - Align's manufacturing facilities are located in Juarez, Mexico; Ziyang, China; and Wroclaw, Poland, designed to enhance operational efficiency[48]. - The company has 866 active U.S. patents and 954 active foreign patents as of December 31, 2023[62]. Sales and Marketing Strategies - The company is focused on controlling spending and managing capital obligations while investing in sales and marketing activities[11]. - The utilization rates for products are expected to be influenced by marketing efforts and the specialization of sales representatives[11]. - In Q1 2023, the company launched the Invisalign Comprehensive 3in3 product, which includes three additional clear aligners and has a three-year treatment expiration date[27]. Workforce and Employee Engagement - The company had approximately 125,800 active Invisalign trained doctors as of December 31, 2023[59]. - The company has approximately 21,610 employees as of December 31, 2023, representing a decrease of 6.7% from December 31, 2022[76]. - The company is committed to a diverse workforce, with over 90% of employees located internationally, primarily in manufacturing and clinical treatment planning roles[78]. - The company has made significant investments in research and development, focusing on areas such as SmartTrack aligner materials, intraoral scanning, and AI-powered innovations[66]. - The company has established a continuous employee listening strategy, including pulse surveys and lifecycle surveys, to enhance employee engagement[85]. - The company offers approximately 1,000 self-directed courses in up to 80 languages as part of its employee development programs[87]. - The company emphasizes employee health and well-being through various wellness programs, including a Month of Wellness initiative[89]. Community Engagement and Corporate Responsibility - The company has donated approximately $2.7 million to Operation Smile since 2013, supporting free surgeries for individuals with cleft conditions[91]. - The company provided almost $2 million to America's ToothFairy, benefiting over 1.3 million children with access to dental care[92]. - The company actively encourages employee volunteerism and community support through initiatives like the Month of Smiles[90]. Regulatory Compliance and Risk Management - The company is subject to various international regulatory frameworks for medical devices, which require compliance with safety and quality standards[67]. - The company has implemented a Quality Management System (QMS) to ensure compliance with medical device regulations in the U.S. and EU[68]. - The company is actively monitoring and adapting to environmental laws and regulations, which may require significant compliance costs in the future[75]. - The company has a strong focus on cybersecurity, with policies and systems in place to protect confidential information and ensure compliance with regulations[73]. - The company engages in foreign currency forward contracts primarily for the Euro, British Pound, Chinese Yuan, Polish Zloty, and Canadian Dollar to mitigate currency risks[287]. Competitive Landscape - Align faces increasing competition from both traditional orthodontic treatments and new entrants in the clear aligner market[64]. - Seasonal trends affect sales, with weaker performance in Europe during summer months and stronger sales in China during the third quarter[63].

Core Viewpoint - Merit Medical (MMSI) is currently viewed as a better value opportunity compared to Align Technology (ALGN) based on various financial metrics and analyst outlooks [1][3]. Group 1: Zacks Rank and Analyst Outlook - MMSI has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while ALGN has a Zacks Rank of 3 (Hold) [1]. - The improving analyst outlook for MMSI suggests a more favorable investment environment compared to ALGN [3]. Group 2: Valuation Metrics - MMSI has a forward P/E ratio of 23.87, significantly lower than ALGN's forward P/E of 31.20, indicating that MMSI may be undervalued [2]. - The PEG ratio for MMSI is 2.12, while ALGN's PEG ratio is 2.49, suggesting that MMSI offers better value relative to its expected earnings growth [2]. - MMSI's P/B ratio stands at 3.72, compared to ALGN's P/B of 6.22, further supporting the notion that MMSI is a more attractive investment [2]. Group 3: Value Grades - Based on the analysis, MMSI has a Value grade of B, while ALGN has a Value grade of C, reinforcing the conclusion that MMSI is the superior value option at this time [3].

Group 1 - Align Technology's stock initially rose by 15% after reporting Q4 2023 financial results, but later surrendered gains to be up less than 1% [1] - The company generated net revenue of $957 million in Q4 2023, a nearly 7% year-over-year increase, exceeding management's guidance of $920 million to $940 million [2] - Management provided guidance for modest top-line growth and improvement in operating margin for 2024, leading to upgrades from Wall Street analysts [2] Group 2 - Align Technology achieved an 11.5% net profit margin in 2023, indicating strong profitability [3] - The company plans to invest $100 million in 2024 to support manufacturing and has introduced a new, faster, and smaller version of the iTero scanner to attract more doctors [3] - In 2023, Align Technology repurchased 1 million shares and has $650 million remaining in share repurchase authorization [3]

Core Viewpoint - Align Technology, Inc. reported strong fourth-quarter fiscal 2023 results with adjusted earnings per share (EPS) of $2.42, reflecting a 39.9% increase year over year, surpassing the Zacks Consensus Estimate by 11% [1] Financial Performance - Fourth-quarter revenues increased by 6.1% year over year to $956.7 million, exceeding the Zacks Consensus Estimate by 3% [2] - Full-year revenues for 2023 reached $3.86 billion, up 3.4% from 2022, also surpassing the Zacks Consensus Estimate by 0.8% [2] Segment Analysis - Clear Aligner segment revenues rose by 6.9% year over year to $781.9 million, driven by higher average selling prices and non-case revenues, despite lower volumes [3] - Imaging Systems & CAD/CAM Services revenues increased by 2.9% to $174.8 million in the quarter [3] Margins and Expenses - Gross profit for the fourth quarter was $669.5 million, an 8.4% increase year over year, with a gross margin expansion of 146 basis points to 70.0% [4] - Operating income increased by 48.9% to $184.9 million, with an operating margin expansion of 556 basis points to 19.3% [4] Cash Flow and Financial Position - At the end of the fourth quarter, cash and cash equivalents were $937.4 million, down from $1.23 billion at the end of the third quarter [5] - Cumulative net cash provided by operating activities was $785.8 million, up from $738.9 million in the previous quarter [5] Future Guidance - For 2024, Align Technology anticipates mid-single-digit revenue growth compared to 2023, with a Zacks Consensus Estimate of $4.06 billion [6] - The company plans to invest approximately $100 million in capital expenditures for building improvements and manufacturing capacity [6] Strategic Developments - The company gained FDA clearance for the Invisalign Palatal Expander System and launched the new iTero Lumina intraoral scanner, enhancing practice efficiency [7] - Continued focus on international expansion, patient demand, and orthodontist utilization to maintain leadership in digital orthodontics and dentistry [7]

Q4 and Fiscal 2023 Financial Results Align Technology, Inc. January 31, 2024 ©2024 Align Technology Inc. All rights reserved. 1 Q4 and Full Year 2023 Conference Call Details Conference call Speakers: Joe Hogan, President and CEO John Morici, CFO Shirley Stacy, VP, Finance, Investor Relations and Corporate Communications Webcast Archive: ...

Align Technology, Inc. (NASDAQ:ALGN) Q4 2023 Earnings Conference Call January 31, 2024 4:30 PM ET Company Participants Shirley Stacy - VP, Corporate Communications & IR Joseph Hogan - President, CEO & Director John Morici - CFO & EVP, Global Finance Conference Call Participants Elizabeth Anderson - Evercore ISI Jeffrey Johnson - Robert W. Baird & Co. Jonathan Block - Stifel, Nicolaus & Company Jason Bednar - Piper Sandler & Co. Brandon Vazquez - William Blair & Company Nathan Rich - Goldman Sachs Group Mich ...

Core Insights - Align Technology reported revenue of $956.73 million for the quarter ended December 2023, reflecting a 6.1% increase year-over-year [1] - The earnings per share (EPS) was $2.42, up from $1.73 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $928.57 million by 3.03%, while the EPS surpassed the consensus estimate of $2.18 by 11.01% [1] Financial Performance Metrics - Clear Aligner Shipments totaled 593, slightly above the average estimate of 592 from two analysts [2] - Net revenues from Imaging Systems and CAD/CAM Services were $174.81 million, compared to the average estimate of $175.81 million, marking a year-over-year increase of 2.9% [2] - Total Clear Aligner net revenues reached $781.91 million, exceeding the estimated $753 million, representing a year-over-year growth of 6.9% [2] Stock Performance - Align Technology's shares have declined by 1.6% over the past month, while the Zacks S&P 500 composite increased by 3.3% [2] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [2]