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Shares of Align Technology, Inc. (NASDAQ: ALGN) — maker of Invisalign — plummeted Thursday in reaction to the company's second-quarter earnings report and guidance but CEO Joe Hogan remains "optimistic about the market."
On top of reporting an earnings miss in the quarter, Align shipped 377,100 of its core Invisalign cases which fell 5,800 units short of expectations. Hogan told CNBC's Jim Cramer Thursday much of the weakness can be attributed to China.
China is Invisalign's second largest market and the company hoped to see 70% growth in the second quarter, the CEO told Cramer. But Thursday's report showed just 20%-30% growth and the weakness is not due to any competitive or operational issues.
"It's just basically a consumer backlash right now, we feel, from a standpoint of making decisions on going ahead with aligners or not," Hogan said.
Outside of China, the company saw notable strength across Europe at 39% and a triple-digit growth rate in markets like Brazil.
Why It's Important
Hogan said he was in Asia for first-hand checks and there is no sign his company is losing market share despite a growing competitive market. In fact, Hogan said he saw higher levels of orders throughout July in China, and encouragingly, also in the U.S. market.
Shares of Align plummeted nearly 30% Thursday and Hogan said the company has around $400 million in remaining share buyback authorization. As such, the company will "certainly take advantage" of its position and when asked by Cramer if he will personally be buyer of the stock the CEO responded "I think you will see that also."
"There is a broad based growth story here," he said. "I have to do a better job and the company has to do a better job of getting out. It's not necessarily a competitive story, it's an opportunity story for us overall."
The stock traded around $198 per share at time of publication.
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