The days of uncomfortable metal braces to fix a crooked smile are ending thanks to modern clear align technology, which uses transparent plastic that takes less time to align teeth, suggests Mike Cintolo, growth stock expert and editor of Cabot Top Ten Trader.
The demand for this orthodontic technique is expected to grow at a 17% annual clip through 2026. Align Technology (ALGN), a leader in this field, makes clear aligners and 3D digital scanners which are used to model stages between current and desired teeth positions before the aligners are 3D printed.
The company’s Invisalign braces are fast becoming the top choice for patients, while its iTero scanners are widely used within the orthodontic profession. Business fell off for Align after nearly 70% of dental offices worldwide were closed during the worst of the pandemic, but sales have since staged a comeback.
The top line rose by a solid 21% in Q3 (up 108% sequentially), with Invisalign case shipments up 29%, reflecting strong sales across all regions for both Invisalign clear aligners and iTero scanners.
Moreover, Align is aggressively expanding its digital presence in the pandemic’s wake, recently unveiling its cloud-based ClinCheck Pro 6.0 treatment planning software (which minimizes the doctor-patient interaction), along with the My Invisalign app.
Analysts are projecting record revenue for Align in the coming year, with a 34% top line increase predicted for Q1 2021, followed by a massive 120% sales bump in Q2 (total-year revenue is likely to rise in the mid 30% range).
Big picture, the market here is 300 million patients, compared to nine million Invisalign customers today; management is hard at work to capture those, including a new program to help customers switch braces patients into Invisalign treatment by buying back their wires and brackets inventory.
The long-term potential for Align is huge, and it’s well positioned for growth as the economy reopens. If you want in, we think you can start a position here or on further dips.
