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Align Technology (ALGN) to Post Q4 Earnings: What's in Store?

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Align Technology, Inc. ALGN is set to report fourth quarter and full-year 2021 results on Feb 2, after the closing bell.

In the last-reported quarter, the company reported adjusted earnings per share (EPS) of $2.87, which surpassed the Zacks Consensus Estimate by 13.9%. The company beat earnings estimates in the trailing four quarters, the average surprise being 20.4%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

Invisalign System

Align Technology has been witnessing increased utilization of Invisalign Clear Aligners and continued uptake of iTero scanners since the past few quarters. This momentum is likely to have continued throughout the fourth quarter on the heels of reopening practices and growing doctor acceptance of the Align Digital Platform. However, considering the recent COVID-19 resurgences, especially with the emergence of the highly contagious Omicron variant, we are vigilant about the impact on practices around the world during the fourth quarter.

The company has been registering substantial growth in Invisalign volumes within the teen segment, driven by increased Invisalign utilization and case submissions from Invisalign doctors. We believe this to have full-quarter contribution to fourth-quarter revenues. In its third-quarter earnings call, the company noted that it has expanded the next generation of the "Invis is" media campaign across EMEA, APAC and Brazil to raise awareness regarding Invisalign treatment in adults, parents, and teen consumers. This is expected to bolster Invisalign adoption in the to-be-reported quarter. In addition, the growing use of the My Invisalign application and Virtual Care feature is likely to have driven Invisalign adoption further, resulting in improved sales.

Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. Price and EPS Surprise

Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote

Align Technology has been developing a robust retainer strategy to expand its share in the significantly underpenetrated retention market. Through clinical education and sales initiatives, the company aims to raise brand awareness for Vivera retainers and drive engagement with doctors while connecting consumers with doctors through demand creation programs and concierge service. We anticipate these initiatives to drive sales of Vivera retainers, thereby contributing to the company’s fourth-quarter revenues.

The exclusive launch of the Invisalign Whitening Pen in the United States via an e-commerce channel in the third quarter is also likely to have benefited the company’s fourth-quarter performance.