So you think straighter teeth will make all the difference, but can't see yourself wearing braces in the boardroom? No problem. There's an outfit in Santa Clara, California that has the answer.
Align Technology Inc. (NASDAQ:ALGN) makes the Invisalign system, a proprietary method for treating crooked teeth. Invisalign corrects the condition using a series of clear, nearly invisible, removable Aligners that gently move teeth to a desired final position. Because it does not use brackets and wires, Invisalign significantly reduces the aesthetic limitations of braces and is appropriate for treating adults and older teens.
The company pleased investors last week when it reported a Q4 loss of a penny per share and revenues of $55.2 million. Analysts had been looking for a fifteen cent loss and sales of $54 million. Management also guided Q1 EPS to 2-4 cents (beating the 5 cent loss consensus), Q1 revenues to $56.8-$59.8 million (compared to the $54.75M consensus), FY07 EPS to 15-27 cents (penny loss consensus) and FY07 revenues to $240-$255 million ($238.37M consensus).
Shares popped above the 30-day/50-day moving average support on the news and are now consolidating the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with three "buys" and six "holds". Analysts see a 460% growth rate, through the next year. The ALGN Price to Sales ratio of 5.04 compares favorably with the sector average. Institutional investors hold about 71% of the outstanding ALGN shares. Over the past 52-weeks, the stock has traded between $5.62 and $17.01. A stop-loss of $14.25 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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