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Align Technology (ALGN) Beats on Q1 Earnings and Revenues
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Align Technology Inc.(ALGN - Free Report) reported adjusted earnings per share (EPS) of 85 cents in the first quarter of 2017, up 70% from 50 cents posted in the year-ago quarter. Earnings were higher than the company’s guided range of 64−67 cents. Also, the figure handily beat the Zacks Consensus Estimate of 67 cents.
Revenues
Revenues grew 30.0% year over year to $310.3 million in the quarter, surpassing the Zacks Consensus Estimate of $297 million.
Per management, strong top-line was driven by robust Invisalign case shipments of 27% year over year to 38.9 thousand doctors shipped during the first quarter. The upside was backed by growth in North America and international regions and a 32% year-over-year increase in teenage cases across the board.
Align Technology, Inc. Price, Consensus and EPS Surprise
Revenues at the Clear Aligner segment (91.0% of total revenue) increased 28.5% year over year to $282.4 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographies.
In the first quarter, Invisalign case shipments amounted to 208,060, up 27.1% year over year, aided by growth across all regions. During the quarter, Align Technology added 38,865 Invisalign doctors worldwide, out of which 23,910 were from North America while 14,955 were from international regions.
Revenues from Scanner and Service (9.0%) improved a massive 46.9% to $27.9 million.
Margins
Gross margin in the first quarter was up 25 basis points (bps) year over year to 75.1% on a 28.6% rise in cost of net revenue.
During the quarter, Align Technology witnessed a 34.70% year-over-year increase in selling, general and administrative expenses to $151.1 million and a 51.19% hike in research and development (R&D) expenses to $22.8 million. The operating margin, however, contracted 247 bps to 23.3% due to higher operating expenses.
Financial Details
Align Technology exited the first quarter with cash and cash equivalents and short-term marketable securities of $545.6 million, down from $640.3 million at the end of 2016.
In the reported quarter, Align Technology repurchased approximately 0.04 million shares for $3.8 million and completed its 2014 Repurchase Program. Management has $300 million available for repurchase under the 2016 repurchase plan, which was announced last April.
Guidance
For the second quarter of 2017, the company projects EPS of 71−74 cents on revenues of $340–$345 million. The company also expects Invisalign case shipments in the band of 221,000 to 224,000, up 25%–27% over the same period a year ago.
Our Take
Align Technology concluded the first quarter with in-line earnings and revenues. We are upbeat about the continued strong Invisalign volumes, which in turn drove the top line.
Additionally, the company has a strong cash balance that enables it to carry out share repurchase programs and in turn provide solid returns to investors. Going forward, management anticipates consistent growth in the Asia-Pacific region.
Zacks Rank & Other Key Picks
Align Technology currently has a Zacks Rank #2 (Buy). Other top-ranked medical stocks are Heska Corporation , Hologic, Inc. (HOLX - Free Report) and Avinger, Inc. (AVGR - Free Report) . Heska and Hologic sport a Zacks Rank #1 (Strong Buy), while Avinger has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heska has a long-term expected earnings growth rate of 21.4%. The stock represents an impressive one-year return of 244.5%.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 32.8%.
Avinger projects sales growth of 2.3% for the current year. Additionally, the company delivered a positive earnings surprise of 27% last quarter.
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Align Technology (ALGN) Beats on Q1 Earnings and Revenues
Align Technology Inc.(ALGN - Free Report) reported adjusted earnings per share (EPS) of 85 cents in the first quarter of 2017, up 70% from 50 cents posted in the year-ago quarter. Earnings were higher than the company’s guided range of 64−67 cents. Also, the figure handily beat the Zacks Consensus Estimate of 67 cents.
Revenues
Revenues grew 30.0% year over year to $310.3 million in the quarter, surpassing the Zacks Consensus Estimate of $297 million.
Per management, strong top-line was driven by robust Invisalign case shipments of 27% year over year to 38.9 thousand doctors shipped during the first quarter. The upside was backed by growth in North America and international regions and a 32% year-over-year increase in teenage cases across the board.
Align Technology, Inc. Price, Consensus and EPS Surprise
Align Technology, Inc. Price, Consensus and EPS Surprise | Align Technology, Inc. Quote
Segments in Detail
Revenues at the Clear Aligner segment (91.0% of total revenue) increased 28.5% year over year to $282.4 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographies.
In the first quarter, Invisalign case shipments amounted to 208,060, up 27.1% year over year, aided by growth across all regions. During the quarter, Align Technology added 38,865 Invisalign doctors worldwide, out of which 23,910 were from North America while 14,955 were from international regions.
Revenues from Scanner and Service (9.0%) improved a massive 46.9% to $27.9 million.
Margins
Gross margin in the first quarter was up 25 basis points (bps) year over year to 75.1% on a 28.6% rise in cost of net revenue.
During the quarter, Align Technology witnessed a 34.70% year-over-year increase in selling, general and administrative expenses to $151.1 million and a 51.19% hike in research and development (R&D) expenses to $22.8 million. The operating margin, however, contracted 247 bps to 23.3% due to higher operating expenses.
Financial Details
Align Technology exited the first quarter with cash and cash equivalents and short-term marketable securities of $545.6 million, down from $640.3 million at the end of 2016.
In the reported quarter, Align Technology repurchased approximately 0.04 million shares for $3.8 million and completed its 2014 Repurchase Program. Management has $300 million available for repurchase under the 2016 repurchase plan, which was announced last April.
Guidance
For the second quarter of 2017, the company projects EPS of 71−74 cents on revenues of $340–$345 million. The company also expects Invisalign case shipments in the band of 221,000 to 224,000, up 25%–27% over the same period a year ago.
Our Take
Align Technology concluded the first quarter with in-line earnings and revenues. We are upbeat about the continued strong Invisalign volumes, which in turn drove the top line.
Additionally, the company has a strong cash balance that enables it to carry out share repurchase programs and in turn provide solid returns to investors. Going forward, management anticipates consistent growth in the Asia-Pacific region.
Zacks Rank & Other Key Picks
Align Technology currently has a Zacks Rank #2 (Buy). Other top-ranked medical stocks are Heska Corporation , Hologic, Inc. (HOLX - Free Report) and Avinger, Inc. (AVGR - Free Report) . Heska and Hologic sport a Zacks Rank #1 (Strong Buy), while Avinger has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heska has a long-term expected earnings growth rate of 21.4%. The stock represents an impressive one-year return of 244.5%.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 32.8%.
Avinger projects sales growth of 2.3% for the current year. Additionally, the company delivered a positive earnings surprise of 27% last quarter.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>