ALGN - Embedded Expectations Analysis - 2021 03 19
Align Technology, Inc. (ALGN:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 57.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about Invisalign portfolio growth, their digital appointment capabilities, and dentist engagementSpecifically, management may lack confidence in their ability to maintain the average sales price of their products, sustain Invisalign portfolio growth internationally, and capitalize on opportunities to reach more consumers, especially within the teenage demographic. Moreover, they may have concerns about the sustainability of Invisalign demand among dentists, the quality of their targeted advertisements, and potential pandemic-related disruptions to business growth. Additionally, they may lack confidence in their ability to maintain strong digital engagement, sustain virtual appointment increases, and engage more doctors through the Aligned Digital and Practice Transformation (ADAPT) program. Finally, they may be exaggerating the potential of their investments in China and ClinCheck Pro 6.0 and iTero Element Plus product launches
Align Technology is a medical device company engaged in the design, manufacture and marketing of Invisalign? clear aligners and iTero? intraoral scanners and services for orthodontics, restorative and aesthetic dentistry. The company's segments are: Clear Aligner, which includes the Invisalign System, a method for treating malocclusion based on a proprietary computer-simulated virtual treatment plan and a series of doctor-prescribed, custom manufactured, clear plastic, removable aligners; and Scanners and Services, which includes Intraoral scanning that enables the dental practitioner to create a 3D image of the patient's teeth (digital scan) using a handheld intraoral scanner.
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