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Align Technology Rides High on InvisAlign & Strategic Pacts

Zacks

On Dec 4, we issued an updated research report on Align Technology, Inc. ALGN. The stock sports a Zacks Rank #1 (Strong Buy).

Over the past three months, Align Technology has been trading above the broader industry. The stock has rallied 26.3% compared with the industry’s 2.6% growth during the period. Post a promising third-quarter 2017 performance, we are encouraged by the company’s solid InvisAlign prospects as well as its growth in North America and internationally, particularly in the Asia-Pacific region. The reported quarter marked another milestone for the company as China became the second largest global market with United States topping the numbers.


We are particularly impressed with soaring demand for the InvisAlign products in the teen market worldwide. Also, we are upbeat about the company having signed a distribution agreement with Patterson Dental (PDCO) under which, Align Technology’s iTero Element intraoral scanning system will be available as part of Patterson Dental’s CAD/CAM portfolio in the United States and Canada. Additionally, the company’s receipt of two U.S. patents for SmartTrack InvisAlign Aligner material buoys optimism.

Align Technology witnessed a balanced rise in sales across all its channels in the recent past, primarily driven by high InvisAlign Technology case volumes. Solid performance in the summer drove InvisAlign growth in the global teen market.

In an encouraging development, the company recently signed a distribution agreement with Patterson Dental. Per the non-exclusive agreement, effective from September, Align Technology’s iTero Element intraoral scanning system will be available as part of Patterson Dental’s CAD/CAM portfolio in the United States and Canada.

On the flip side, adverse foreign exchange translation continues to raise concerns for Align Technology’s international operations. Also, escalating costs and expenses are weighing on margins. Moreover, a tough competitive landscape and other macroeconomic headwinds pose a threat.

Key Picks

Other top-ranked medical stocks are PetMed Express, Inc. PETS, Myriad Genetics, Inc. MYGN and Chemed Corporation CHE. Notably, PetMed and Myriad Genetics sport a Zacks Rank #1 (Strong Buy) while Chemed carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 82.8% over a year.

Myriad Genetics has a long-term expected earnings growth rate of 15%. The stock has gained 95.9% in a year.

Chemed has a long-term expected earnings growth rate of 10%. The stock has gained 57.7% in a year.

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