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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.


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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.