Analysts are bullish on Align Technology (NSDQ:ALGN) after the company has seemingly prospered despite the COVID-19 pandemic.
SVB Leerink senior research analyst Richard Newitter explained in an analysis that Align, a maker of clear teeth aligners, is a “unique-in-healthcare” growth asset with an underpenetrated total available market (TAM).
Analysts see the company as a relatively less expensive way to invest in high-growth medtech stock when compared to peers, particularly as the clear aligner space benefits from an accelerating adoption curve that got a major boost from the pandemic.
Align Technology saw increased demand for its clear teeth aligners throughout 2020 as people tended to be more reluctant to go to an orthodontist’s office to get traditional wire teeth braces adjusted. The San Jose, Calif.–based company registered $2.5 billion in sales in 2020, notching 2.7% growth from 2019 when the company earned $2.4 billion in sales. In a pre-pandemic scape, the company grew 22.4% from 2018 to 2019.
Newitter and the analysts expect a strong first quarter of 2021 from the company, with revenues and earnings expected to beat Wall Street projections.
A “COVID-19 hangover” is not expected by the analysts, while what they dubbed the “Zoom effect” brought on by the pandemic is increasing patients’ awareness of physical appearance because they’re viewing themself on a screen.
On top of that, the analysts found that consumers see Align’s Invisalign clear aligners as the best option on the market, with the general view from users insinuating that price discounts from others solutions would need to be bigger to incentivize a switch away from the market-leading option for pricing purposes only.
The analysts have increased their 2021-2022 revenue estimates for Align due to the strong performance and potential down the line.
