So you want straighter teeth, but think braces will hurt your chances for promotion to department head? No problem. There's an outfit in Santa Clara, California that has the answer.
Align Technology (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 firm also provides an Internet-based application that enables orthodontists to choose the correct Aligners by simulating sequential stages of tooth movement. 3M Company (NYSE: MMM) is a competitor.
The company pleased investors last week, when it reported Q1 EPS of ten cents and revenues of $63.8 million. Analysts had been looking for a loss of a penny and $58.5 million. Management also guided Q2 EPS to 10-12 cents (1 cent consensus), Q2 revenues to $72-74 million ($62.21M consensus), FY07 EPS to 30-38 cents (6 cent consensus) and FY07 revenues to $268.4-278.0M ($250.72M consensus). Deutsche Securities, Roth Capital and JMP Securities subsequently reiterated "buy" recommendations.
Shares popped above 30-day/50-day moving average support on the news and are now consolidating the gain in a bullish "flag" pattern. Equities frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Altogether, brokers now recommend the issue with one "strong buy", five "buys" and four "holds". Analysts see an 87% growth rate, through the next year. The ALGN Sales Growth rate (30.47%) and EPS Growth rate (-0.08 to +0.10 yr/yr) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 90% of the outstanding shares. Over the past fifty-two weeks, the stock has traded between $5.62 and $24.28. A stop-loss of $20.45 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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