Align Technology (ALGN) Outpaces Stock Market Gains: What You Should Know
Align Technology (ALGN) closed the most recent trading day at $179.95, moving +1.49% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.27%. Meanwhile, the Dow gained 1.25%, and the Nasdaq, a tech-heavy index, added 1.48%.
Coming into today, shares of the maker of the Invisalign tooth-straightening system had lost 15.2% in the past month. In that same time, the Medical sector lost 2.58%, while the S&P 500 lost 4.37%.
Investors will be hoping for strength from ALGN as it approaches its next earnings release. The company is expected to report EPS of $1.14, down 8.06% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $592.46 million, up 17.25% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.23 per share and revenue of $2.39 billion, which would represent changes of +6.3% and +21.59%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for ALGN. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.62% lower within the past month. ALGN is holding a Zacks Rank of #4 (Sell) right now.
Investors should also note ALGN's current valuation metrics, including its Forward P/E ratio of 33.88. Its industry sports an average Forward P/E of 18.73, so we one might conclude that ALGN is trading at a premium comparatively.
We can also see that ALGN currently has a PEG ratio of 1.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Dental Supplies was holding an average PEG ratio of 1.8 at yesterday's closing price.
The Medical - Dental Supplies industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 56, which puts it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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