Align Technologies (NASDAQ:ALGN) sure has a reason to smile this morning. The company, which happens to be the parent of Invisalign braces, reported a boom in third-quarter sales. Once you dig into the report, the major rally in ALGN stock makes a lot of sense.
Simply put, Align Technologies delivered amazing numbers and blew analyst estimates out of the water.
The company reported earnings per share of $1.76, up from $1.28 last year. Importantly, analysts were only calling for EPS of 54 cents! Align also improved its revenue, reporting total sales of $734.1 million. That is an almost 21% improvement year-over-year.
While the earnings report is largely behind the move higher in ALGN stock, there are a few more fundamental catalysts at play. And yes, you guessed it, the novel coronavirus is one of them.
To really understand how this all fits together, it is important to know exactly what Align Technologies is all about. Its flagship product is Invisalign — clear teeth-straightening products that have become quite appealing. Why get those clunky, metal brackets on your teeth when you can get (hopefully) the same results with a hard-to-see product? Align Technologies has long been seeking to disrupt the orthodontics industry, making it more fun and accessible.
But there are a few more important coronavirus catalysts.
ALGN Stock and Remote Healthcare
Importantly, Align Technologies and rival SmileDirectClub (NASDAQ:SDC) bill themselves as a way to get straight teeth without all of the office visits. These disruptors — and a handful of new startups in the space — became an easier way to get straight teeth amid stay-at-home orders. Importantly, SDC stock is also climbing this morning in sympathy.
Investors will also want to note the rise of social media success for ALGN stock. The company has already credited the likes of Charli D’Amelio, a top TikTok user, and Marsai Martin, a leading actress in the TV show Black-ish. Both celebrities have used their social media platforms to promote the Invisalign products, specifically targeting teen consumers. This all works perfectly for Align Technologies, which recently launched campaigns to target teenagers and moms.
But why does this TikTok success matter so much during the pandemic? Well, we know that consumers have turned to the short-form video platform in record numbers. TikTok became a dominate social media platform, providing a way to escape from and deliver commentary on the coronavirus. Even during the ongoing U.S.-China drama that decided its future, teen and tween users were flocking to the platform. If Align Technologies can continue to disrupt the orthodontics industry and find success on new platforms, it bodes well for ALGN stock.
It looks like record earnings, straight teeth and a little bit of TikTok stardom are all this company needs. Make sure to keep Align Technologies on your coronavirus stocks watchlist.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.