Accelerated Stock Purchase And Earnings Report Can’t Push Align Technology, Inc. (NASDAQ:ALGN) Up


Dallas, Texas 05/07/2014 (FINANCIALSTRENDS) – Align Technology, Inc. (NASDAQ:ALGN) is stubbornly refusing to leave the threshold of $50 behind, despite a better than expected first quarter earnings report followed up by an accelerated stock repurchase program.

Align Technology First Quarter Earnings Report

Align Technology posted first quarter 2014 net revenues of $180.6 million, up 17.6% as compared to the same quarter in 2013. GAAP net profit for the first quarter 2014 was $32.4 million, or $0.39 per diluted share (non-GAAP $0.13 per diluted share). This represents an increase of 52.7% year-over-year, and easily beat analyst estimates too.

Revenues from Invisalign Clear Aligner added up to $168.2 million, or 93.1% of total revenue. This segment revenue is 18.8% more as compared to the same quarter last year.

Thomas M. Prescott, Align president and CEO, said that, “We’re pleased with our overall first quarter results with better than expected revenue and earningsThis solid growth reflects continued expansion of our customer base, as well as increased adoption and utilization, as doctors treat more patients with Invisalign.”

Accelerated Stock Repurchase Program

Regardless, it didn’t do much for the price of ALGN, which rose up to around $52-53 right before the quarterly results were released, and then dropped down to $50 or so. At the end of April, the Company announced an accelerated stock repurchase agreement to repurchase $70 million of ALGN common stock, as part of a 3-year $300 million stock repurchase program that had been announced along with the release of the quarterly earnings report.

Even so, ALGN is still on a “hold” after the earnings report, with analysts from Credit Suisse and Cantor Fitzgerald reiterating their ratings and Zacks actually downgrading it from outperform to neutral. The price targets set by analysts are generally above $55, and the consensus price target is for $61. That leaves a lot of room to grow, assuming that ALGN gives up squatter rights on the $50 level.

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