Healthcare Sector Ideas

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>>> Align Tech (ALGN) -- We started with a stalwart of the online dating realm – but it’s always easier to find a date when you have a great smile, and the next stock, Align Tech, can help with that. Align works with both high tech and orthodontics; the company’s chief product is a clear orthodontic aligner used to straighten teeth. The company uses a line of high-end 3D scanners to manufacture its proprietary Invisalign product.


https://finance.yahoo.com/news/insiders-pour-millions-2-stocks-000640934.html


Align got its start back in the 1990s, and Invisalign was first approved for use in 1998. The company has grown to become a $23 billion giant in the last 25 years, and employs over 24,000 people globally. Align saw $3.8 billion in total revenue last year, and boasts some 15.1 million Invisalign patients since the product first hit the markets.

The current year started with both the top and bottom lines better than the analysts had expected. The 1Q23 revenue of $943.1 million beat expectations by $39.9 million, while the non-GAAP diluted EPS of $2.25 exceeded the consensus by 13 cents. However, the company’s case volume in 1Q23 of 575.4K slipped by 1% compared to 4Q22.

On a positive note, Align’s Clear Aligner revenue, its chief revenue driver, grew 8% quarter-over-quarter, despite the 1% slip in case volume. The company believes that increasing customer confidence, and the post-COVID easing of restrictions in China, will bring stability to the target market. Align is guiding toward 2Q23 revenue in the range of $980 million to $1 billion.

Notably, Kevin Dallas, a member of the firm’s Board of Directors, made a significant insider purchase last week. Dallas demonstrated his confidence in the company by investing nearly $2 million to acquire 7,000 shares of the stock. As a result, his total holdings of ALGN now amount to approximately $3.7 million.

Morgan Stanley’s 5-star analyst Erin Wright is also taking a bullish stance on Align. She writes of the company: “Our longer term thesis for ALGN remains, where its leadership positioning in an attractive, highly underpenetrated market, along with rising adoption of digital workflows should support +DD earnings growth LT. All in, with its shares now trading at 35.8x our 2024e EPS, at parity with its closest competitor Straumann, we do not believe its current valuation fully reflects its longer term growth prospects.”

Wright’s comments back up her Overweight (i.e. Buy) rating on the stock, and her price target of $383 implies a solid upside of 26% out to the one-year horizon. (To watch Wright’s track record, click here)

Once again, we’re looking at a stock with a Moderate Buy consensus rating from the Street. Align’s 7 recent analyst reviews break down to 5 Buys and 1 Hold and Sell each; the stock’s $349.33 average price target and $304.68 trading price suggests ~15% one-year upside potential.

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