Align Technology (ALGN)

Q4 CY2024 Performance

* Revenue: $995.2 million (in line with estimates)
* Non-GAAP EPS: $2.44 (in line with estimates)
* Adjusted Operating Income: $230.4 million (above estimates)
* Revenue Guidance for Q1 CY2025: $975 million (below estimates)

Key Highlights

* Clear Aligner volumes grew 6.1% year-over-year, driven by increased shipments across all regions.
* Adjusted Operating Margin of 23.2%, in line with the same quarter last year.
* EPS of $2.44, up from $2.42 in Q4 2023.

Company Overview

Align Technology specializes in clear aligner therapy and digital dental solutions. Its products include the Invisalign system for teeth straightening and iTero scanners for precise digital imaging.

Industry Overview

The dental equipment and technology industry benefits from recurring revenue streams from consumables and ongoing maintenance. Innovation in digital workflows, such as 3D printing and AI-driven diagnostics, is driving growth. However, economic uncertainty and regulatory challenges pose headwinds.

Sales Growth

Align Technology's revenue growth has slowed recently, with a 3.5% annualized growth rate over the last two years. However, analysts expect revenue to grow 5.1% over the next 12 months.

Adjusted Operating Margin

Align Technology's adjusted operating margin of 23.2% is in line with its historical average of 22.8%.

Earnings Per Share

Align Technology's EPS grew at a 9.3% compounded annual growth rate over the last five years. Wall Street expects EPS to grow 8.5% over the next 12 months.

Key Takeaways

* Missed revenue guidance for Q1 CY2025.
* Underperformance in the latest quarter.
* Consider valuation and business qualities before making investment decisions.