Stock (Symbol) |
Align Technology (ALGN) |
Stock Price |
$254 |
Sector |
| Healthcare |
Data is as of |
| March 3, 2018 |
Expected to Report |
| Apr 25 |
Company Description |
 Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. Source: Thomson Financial. |
Sharek’s Take |
 Align Technology (ALGN) is truly on fire. The stock was less than $100 a year ago and is now $225 (wait it was $225 when these charts were done 9 days ago, it’s $248 now). Align is the company that designs and manufactures Invisalign clear braces and iTero scanners, which dentists use to scan teeth for a fitting. Here’s some highlights from last qtr:
Align also supplies clear aligners to SmileDirectClub, and has a 19% stake in the company. SmileDirectClub is an at-home doctor-directed program which is less expensive than the regular routine. And a year ago ALGN launched a lighter version of its braces, called Invisalign Light, which includes up to 14 stage aligners vs 40 or more sets in Invisalign when teeth are more crooked. This could prove to be a future catalyst for a company that doesn’t seem to need it. Also, the company repurchased $100 million in stock in 2017. ALGN is up from $100 to $250 in a year. Whew. And I was watching the stock a year ago and let it slip away — ugh! For the 2nd straight qtr the stock has a P/E of 51, and since my Fair Value is a P/E of 45 I’m looking for a dip to buy in. During the last 4 qtrs 2018 profit estimates have increased from $3.86 to $4.07, $4.43 and now $4.51. So the rate of increase has slowed. But Align has whipped analyst estimates for the last 3 qtrs so management could be underpromising to overdeliver. I have ALGN on my radar for the Growth Portfolio and I’m dying to buy in. But not now as the stock is already at my 2019 price target. |
One Year Chart |
 Jesus, what a run. And this all started after the company delivered 18% profit growth and missed estimates of 34%. Then it was off to the races. Qtrly profit Estimates are 64%, 21%, 18% and 12% for the next qtrs, but growth has been accelerating so these may be too low. I like the Est. LTG of 29% a year, but that P/E of 51 is high. But this is a quality growth stock so you get what you pay for. |
Fair Value |
 I suspect ALGN can make $5 this year, and a P/E of 45 would be a $225 stock. Well the stock’s already past that. Actually, these charts were done on 3/3 and I’m writing this report on 3/15. The stock’s at $273 today, up around 10% from when these chats and tables were done. This is one hot stock. Wow. |
Bottom Line |
 Align Technologies is one of the best stocks in the market, but note in the ten-year chart it went on a parabolic run last year. Those are always dangerous to buy into. Now the stock seems to me consolidating its gains. Hopefully it will stick around here for 6 months or so and give me an opportunity to get in. ALGN is on the Growth Portfolio and Aggressive Growth Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
