Align Technology, Inc. (NASDAQ:ALGN) stock has rallied nearly 45% in the past three months. In the past year, it’s up almost 84%. Must be some kind of exciting technology.
So, what kind of tech are we talking about here? Telecom? Chips? A promising biotechnology? A new Apple Inc. (NASDAQ:AAPL) subcontractor?
Nope. ALGN makes braces. You know — for your teeth.
But these aren’t the “metal mouth” braces of old. These are Braces 2.0. They are clear plastic mouthpieces that are custom fitted to your top and bottom teeth.
When they first came out, they were primarily used by adults with disposable income that they could spend on straightening their teeth, or by people who had braces when they were younger, but their teeth became misaligned over the ensuing years.
ALGN started in 1999 with its Invisalign system, and by 2001 it had manufactured more than 1 million devices. At this point, the company operates in more than 90 countries.
But the story here isn’t really about more attractive braces, it’s about a company that is disrupting an industry that no one thought of disrupting. ALGN is selling a new system for making a new kind of braces, or “aligners” as the company calls them, and Align stock shows significant promise as a result.
How Does Align’s Product Work?
Simply put, participating dentists purchase proprietary digital imaging equipment and software that measures a patient’s mouth and then creates 3D models used to build the aligners. So, ALGN is making money on both the front end and the back end.
The patient gets 24 aligners for a 12-month treatment time frame, with each set slightly adjusted as your teeth align. The best thing about the aligners is you can pop them out when you eat or go out on the town, then just pop them back in later.
They’re very discreet, which is more than you can say for traditional braces.
Align’s aligners don’t address more significant alignment challenges. But it’s still a big market that ALGN continues to expand. From its initial model, the company now offers eight different types of alignment systems specific to several price points and demographics.
Bottom Line on ALGN Stock
The reason Align Technology has taken off is simple: People are starting to buy what ALGN is selling.
In late April, management announced its Q1 results, and they blew away estimates. Revenue for the quarter was up 30% over the same quarter last year. Case shipments were up 27%, with international case shipments up 41%. And, case shipments for teenagers — one of Align’s new lines — were up 32%.
This is a huge jump from Align’s strong, steady growth, and it is likely that we’re witnessing the start of ALGN stock and this company hit the big time.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
