Align Technology‘s ALGN shares have soared 20.5% year to date, leaving the broader medical-dental supplies industry’s 6.2% growth in the dust. The remarkable climb in the Medical sector, up 3% during the same period, pales in comparison. With a market capitalization of $24.80 billion, Align Technology is undoubtedly making waves in the industry.
Bearing a Zacks Rank #2 (Buy), Align Technology stands poised to spearhead the digital transformation within the dental realm, armed with its Invisalign clear aligners, Itero Scanners, and the Align digital platform. Projections suggest a 14.2% growth in earnings for the upcoming year.
Prospects for Further Growth
Insight into future growth indicates a consensus estimate of $4.04 billion in revenues for 2024, depicting a 4.6% uptick year-over-year. Notably, ALGN boasts an ROE of 13.8% over the trailing 12 months, outperforming the industry average of 11.1%.
Capturing the burgeoning malocclusion market strategically, Align Technology addresses one of the most prevalent dental conditions globally. Their data indicates malocclusion currently impacts 60% to 75% of the world’s population, with an estimated 500 million individuals affected. Despite this large cohort, many shy away from treatment due to perceptions, costs, and limited access to care.
By the close of 2023, Align Technology reached significant milestones, with 17 million Invisalign patients treated, including 4.7 million teens. Statistics on Invisalign Clear Aligner shipments paint a picture of success, with shipments for teens and younger patients hitting 809,000 cases, marking an 8% surge compared to 2022.
Expanding horizons, Align Technology conducts digital treatment planning globally, catering to diverse markets such as Costa Rica, China, Germany, Spain, Poland, and Japan. Through strategic investments, the company fosters growth in its products and services, enhancing its foothold in both existing and untapped international markets.
Technological Advancements
Recent advancements, including the introduction of iTero Lumina inter-oral scanner, epitomize Align Technology’s commitment to innovation. This scanner, equipped with superior data capture capabilities, enhances clinical scanning capabilities. The company anticipates strong growth in Invisalign case submissions through the utilization of iTero scanners, driving Invisalign adoption rates.
Upbeat guidance further fuels investors’ confidence in the company’s full-year performance. ALGN’s revenue projection for 2023 hints at a mid-single-digit increase. Operating margins, both GAAP and adjusted, are anticipated to surpass the levels from the previous year. Steady investments are planned, with approximately $100 million earmarked for capital expenditures to bolster expansion efforts.
Market Analysis and Key Picks
Analysts have shown increasing optimism, with ALGN’s 2024 consensus estimate of EPS rising from $9.26 to $9.39 over the past 90 days. This upward trajectory underscores market confidence in Align Technology’s future prospects.
In a broader analysis of the medical domain, stellar performers like Stryker Corporation SYK, Cencora, Inc. COR, and Cardinal Health CAH, in addition to Align Technology, stand out as top-ranked stocks. Recurring earnings beats and robust growth projections cement their positions as sound investment choices.
Investors eyeing growth should watch Stryker closely, with a history of surpassing earnings estimates and a substantial estimated earnings growth rate for 2025. Similarly, Cencora and Cardinal Health exhibit impressive performance metrics, making them notable selections for discerning investors in the medical sector.
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