Explaining The Rally In Align Technology Stock And What To Expect Going Forward

November 7th, 2019 by Trefis Team
ALGN: Align Technology logo
ALGN
Align Technology

Align Technology (NASDAQ:ALGN), a company that produces clear aligners and 3D digital scanners used by dentists, has seen its stock price rise by close to 40% over the last month, driven by stronger Q3 2019 results that beat estimates on both revenues and earnings. The stock has reacted strongly since the company actually saw a major sell-off post its Q2 results published in July, when it warned that Q3 revenue growth could slow on account of headwinds in the Asia-Pacific segment. However, revenue growth over Q3 was stronger-than-expected at about 20% (compared to the implied growth of 16% to 19%, per its guidance). Moreover, the company is projecting robust growth rates of between 20% to 22% for the Holiday quarter.

We ‘step back’ from these recent swings to review Align Technology’s performance over the last few years, as a context for what might come next. Our Interactive dashboard, Why Did Align Technology Stock Rally 40% Over The Last Month And What To Expect Going Forward, reviews the near term reasons and the big picture.
Context for the last few years:
A closer look At Align Technology’s Total Revenues over the last few years and the outlook

Total Revenues for Align Technology substantially increased from $1.47 Bil in 2017 to $1.97 Bil in 2018; an increase of 33.5%.

This compares with Total Revenues growth of:

  • 11.0% in 2015
  • 27.7% in 2016
  • 36.4% in 2017
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We expect Total Revenues growth to be 22% in 2019.

A closer look At Align Technology’s Total Expenses over the last few years and the outlook

Total Expense for Align Technology substantially increased from $1.11 Bil in 2017 to $1.50 Bil in 2018; an increase of 35.3%.

This compares with Total Expense growth of:

  • 15.4% in 2015
  • 27.0% in 2016
  • 32.4% in 2017

We expect Total Expense growth to be 25.5% in 2019.

How has Align Technology’s EBT trended?

EBT for Align Technology increased significantly by 27.9% from $365 Mil in 2017 to $467 Mil in 2018. We expect EBT to increase by 11% to $517 Mil in 2019.

How has Align Technology’s Net Income and EPS trended?

For more details on Align Technology’s Net Income and EPS, view our interactive dashboard analysis.

 

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