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Why Analysts Are Lining Up for Align Technology

PART:
1 2 3 4
Part 2
Why Analysts Are Lining Up for Align Technology PART 2 OF 4

Why Align Technology’s Revenue Is Expected to Rise in 2017

Operational performance in 2Q17

In 2Q17, Align Technology (ALGN) witnessed a robust rise in shipments of Invisalign cases across customer channels and various geographic markets. While this trend, coupled with a sequential rise in Invisalign’s ASPs (average selling prices), helped boost the company’s revenue performance in 2Q17, the rise was partially offset by an unfavorable shift in product mix and higher promotional discounts.

Invisalign shipments picked up in 2Q17, buoyed by robust demand from North American orthodontists, general physicians, and international doctors. The company also witnessed marked expansion in its customer base, especially in Asia-Pacific markets. Align Technology also benefited from the addition of 5,000 new Invisalign trained doctors, the major driver for Invisalign demand.

If these positive trends continue in future quarters, they could boost Align Technology’s share prices as well as those of the Vanguard Total Stock Market ETF (VTI). Align Technology makes up about 0.05% of VTI.

Why Align Technology&#8217;s Revenue Is Expected to Rise in 2017

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Rise in revenue in 2017

Wall Street analysts have projected that Align Technology will report revenue close to $1.4 billion in fiscal 2017, which will be year-over-year growth of around 29.4%. For more about the financial guidance provided by Align Technology for fiscal 2017 and analyst estimates, read Inside Align Technology’s Robust Revenue Growth Projection for 2017.

In 2017, peers 3M (MMM), Danaher (DHR), and Dentsply Sirona (XRAY) are expected to earn revenue of ~$30.8 billion, ~$18.1 billion, and ~$4.0 billion, respectively.

Consumer marketing campaigns

In 2017, Align Technology has benefited greatly from consumer marketing campaigns for the Invisalign brand. The company has been investing aggressively in new promotional campaigns and optimizing online spending in older campaigns by adjusting its media mix. In the next part, we’ll look at Align Technology’s margin growth prospects.

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