Align Technology (ALGN) to Post Q4 Earnings: What's in Store?
Align Technology, Inc. ALGN is set to report fourth quarter and full-year 2021 results on Feb 2, after the closing bell.
In the last-reported quarter, the company reported adjusted earnings per share (EPS) of $2.87, which surpassed the Zacks Consensus Estimate by 13.9%. The company beat earnings estimates in the trailing four quarters, the average surprise being 20.4%.
Let’s take a look at how things have shaped up prior to this announcement.
Factors at Play
Invisalign System
Align Technology has been witnessing increased utilization of Invisalign Clear Aligners and continued uptake of iTero scanners since the past few quarters. This momentum is likely to have continued throughout the fourth quarter on the heels of reopening practices and growing doctor acceptance of the Align Digital Platform. However, considering the recent COVID-19 resurgences, especially with the emergence of the highly contagious Omicron variant, we are vigilant about the impact on practices around the world during the fourth quarter.
The company has been registering substantial growth in Invisalign volumes within the teen segment, driven by increased Invisalign utilization and case submissions from Invisalign doctors. We believe this to have full-quarter contribution to fourth-quarter revenues. In its third-quarter earnings call, the company noted that it has expanded the next generation of the "Invis is" media campaign across EMEA, APAC and Brazil to raise awareness regarding Invisalign treatment in adults, parents, and teen consumers. This is expected to bolster Invisalign adoption in the to-be-reported quarter. In addition, the growing use of the My Invisalign application and Virtual Care feature is likely to have driven Invisalign adoption further, resulting in improved sales.
Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote
Align Technology has been developing a robust retainer strategy to expand its share in the significantly underpenetrated retention market. Through clinical education and sales initiatives, the company aims to raise brand awareness for Vivera retainers and drive engagement with doctors while connecting consumers with doctors through demand creation programs and concierge service. We anticipate these initiatives to drive sales of Vivera retainers, thereby contributing to the company’s fourth-quarter revenues.
The exclusive launch of the Invisalign Whitening Pen in the United States via an e-commerce channel in the third quarter is also likely to have benefited the company’s fourth-quarter performance.
The Zacks Consensus Estimate for Invisalign System’s revenues is pegged at $833 million, suggesting an upsurge of 18.9% from the year-ago quarter’s reported figure.
Imaging Systems & CAD/CAM Services Business
The company has been observing continued adoption of iTero Element 5D Plus Series and iTero NIRI (Near Infra-Red Imaging) technology and this trend is anticipated to have continued in the to-be-reported quarter as well.
Apart from this, Align Technology’s continued integration progress and product plans with exocad are likely to have had a positive impact on its fourth-quarter performance.
During the third quarter, exocad launched its next generation of easy-to-use CAD single-visit dentistry software, ChairsideCAD3.0 Galway, which allows users to combine open hardware and materials of their choice. In October 2021, Align Technology reported findings of a multi-center clinical study that confirmed that iTero Element 5D imaging system with iTero NIRI technology is more sensitive in detecting early enamel lesions than bitewing radiography. These developments are likely to have a beneficial impact on the company’s imaging systems & CAD/CAM services business in the to-be-reported quarter.
The Zacks Consensus Estimate for this segment’s revenues is pegged at $187 million, suggesting an uptick of 39.8% from the year-ago quarter’s reported figure.
Furthermore, we expect the increase in the number of intraoral digital scans used for Invisalign case submissions and the robust scanner shipments and services to have full-quarter contribution in the to-be reported quarter’s top line.
Q4 Estimates
The Zacks Consensus Estimate for the company’s fourth-quarter 2021 revenues is pegged at $1.02 billion, suggesting an improvement of 22.2% from the year-ago reported figure.
The Zacks Consensus Estimate for its fourth-quarter 2021 EPS of $2.67 suggests a 2.3% uptick from the year-ago reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
AMN Healthcare Services, Inc. AMN has an Earnings ESP of +10.29% and a Zacks Rank of 2. The company is slated to release fourth quarter and full-year 2021 results on Feb 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.9% compares favorably with the industry’s 1.1%.
Hologic, Inc. HOLX has an Earnings ESP of +1.56% and a Zacks Rank of 2. The company is anticipated to release first-quarter fiscal 2022 results on Feb 2.
Hologic’s long-term earnings growth rate is estimated at 7.4%. HOLX’s earnings yield of 5.4% compares favorably with the industry’s (5.4%).
Henry Schein, Inc. HSIC has an Earnings ESP of +2.62% and a Zacks Rank of 2. The company will report its fourth quarter and full-year 2021 results on Feb 15.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 6.4% compares favorably with the industry’s 4.4%.
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