Align Technology (ALGN) PT Raised to $110 at Stifel Amid Invisalign Prospects
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Stifel analyst Jonathan Block reiterated a Buy rating and raised his price target on Align Technology (NASDAQ: ALGN) to $110.00 (from $95.00), noting the company is quietly undergoing important strategic changes to better position the company for future growth, which we believe is currently being overlooked by investors.
Block commented, "At its core, Align appears to be the same company as in years past. Ongoing innovation is helping to drive increasing utilization, notably in the N.A. Orthodontist channel, and International markets continue to offer significant growth opportunities as penetration is <10%. However, Align is quietly undergoing important strategic changes to better position the company for future growth, which we believe is currently being overlooked by investors. New products (palatal expansion and mandibular repositioning) will soon be introduced and expand Align’s reach in the Teen market; the uptake of digital impression (DI) scanners (notably Cadent) is quickly moving Invisalign fully into the digital world; and as we previously explored, the SmileDirectClub (SDC) deal brings significant opportunities (and risks) over the next couple of years. More subtle changes are being made as well, which may have the most significant implications on the company’s future growth rate. In short, Align is upping the ante. The days of broadcasting tens of millions of dollars in advertising and letting provider’s bait and switch the consumer will soon be over. We believe Align will take a more aggressive and targeted direct-to-consumer (DTC) approach and “own” the prospective patient. Providers who are committed to Invisalign will be rewarded with leads. Those who bait and switch (even if they are currently top providers) will see leads rerouted. Align has spent a lot of money on DTC and R&D over the past 18 years ($1B+), add we expect a more forceful approach going forward to monetize it."
Shares of Align Technology closed at $96.19 yesterday.
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