Resources

ALGN – Market expectations are for Uniform ROA expansion, but management may have concerns about Invisalign growth, digital capabilities, and dentist engagement

March 19, 2021

  • Align Technology, Inc. (ALGN:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 57.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about Invisalign portfolio growth, their digital appointment capabilities, and dentist engagement
  • Specifically, management may lack confidence in their ability to maintain the average sales price of their products, sustain Invisalign portfolio growth internationally, and capitalize on opportunities to reach more consumers, especially within the teenage demographic. Moreover, they may have concerns about the sustainability of Invisalign demand among dentists, the quality of their targeted advertisements, and potential pandemic-related disruptions to business growth. Additionally, they may lack confidence in their ability to maintain strong digital engagement, sustain virtual appointment increases, and engage more doctors through the Aligned Digital and Practice Transformation (ADAPT) program. Finally, they may be exaggerating the potential of their investments in China and ClinCheck Pro 6.0 and iTero Element Plus product launches