Research

ALGN – Market expectations are for Uniform ROA contraction, but management is confident about their growth, EPS, and market exposure

  • Align Technology, Inc. (ALGN:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 27.2x Uniform P/E, implying bearish expectations for the firm. However, management is confident about their growth, EPS, and exposure among Chinese patients
  • Specifically, management is confident their teenage promotion is driving trial and adoption in the teen segment, and they are confident tweens are their fastest growing demographic segment. Moreover, they are confident their exposure to China is driving their exposure to an overall broader group of patients, and they are confident the sale of their equity investment in SmileDirectClub generated a $15.8mn gain in the quarter. Furthermore, they are confident their Q2 EPS grew 100% sequentially and 30% over the prior year, and they are confident they are not changing their Q3 guidance.