Align Technology slips 10% despite Q1 beat as case volumes disappoint
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Clear aligner maker Align Technology (NASDAQ:ALGN) lost ~10% Thursday marking the biggest intraday loss since October, while analysts raised concerns over the companyâs case volumes reported with its consensus-beating Q1 2023 earnings results.
The Tempe, Arizona-based medical device maker reported better than expected revenue and earnings for the quarter even as its topline contracted ~3% YoY to $943.1M driven by ~3% YoY drop in clear aligner revenue, the main contributor to the top line.
Sequentially, Clear Aligner revenue improved ~8% to $789.8M despite a ~1% drop in case volumes, which stood at 575.4K during the quarter as consumer confidence returned, bringing stability to markets amid the easing of COVID restrictions in China.
The company expects its Q2 2023 revenue to reach $980M â $1B with a sequential improvement in Clear Aligner volumes and average selling prices.
Commenting on the results, Stifel analyst Jonathan Block with a Buy rating on the stock, argues that case volumes for the quarter fell short of its expectations, a view shared by Jefferies analyst Brandon Couillard.
âWe expect the shares to pare recent gains given 1Q case volume (-1% q/q) fell short of buy-side expectations into the print & still limited visibility into 2H23,â Couillard with a Buy rating on ALGN stock wrote.
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