U.S. Markets close in 6 hrs 17 mins

Why Align Technology Stock Jumped 14.2% in April

Beth McKenna, The Motley Fool

What happened

Shares of Align Technology (NASDAQ: ALGN), the maker of the clear plastic Invisalign dental retainer, jumped 14.2% in April, according to data from S&P Global Market Intelligence. By comparison, the S&P 500 index returned 4.1% last month.

Align stock is up 54.2% in 2019 through May 8, versus the S&P 500's 15.6% return.

Woman touching her clear plastic dental retainer.

Image source: Getty Images.

So what

We can attribute Align Technology's strong performance last month largely to the boost it got following the release of its first-quarter results in late April. In the quarter, revenue rose 25.6% year over year to $549 million and adjusted EPS declined 23.9% to $0.89, beating the $0.83 that Wall Street was expecting.

The earnings decline was driven by "impairments and other charges of $29.8 million related to the closures of its U.S. Invisalign stores," as my colleague Keith Speights wrote. "These closures were required as a result of an arbitrator's decision in a dispute between Align and SmileDirectClub."

Additionally, Align stock benefited from Guggenheim initiating coverage with a buy rating. Shares rose 2.9% following the April 18 news.

ALGN Chart

Data by YCharts.

Align stock's robust April performance was a continuation of its momentum in 2019:

ALGN Chart

Data by YCharts.

Now what

For the year, Wall Street is expecting Align's earnings growth to slow to 11.6% year over year, but then accelerate to 30.2% next year.

 

More From The Motley Fool

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.