Invisalign maker Align Technology missed Wall Street's third-quarter expectations, and ALGN stock plummeted to a 10-month low Thursday.
In premarket trading on the stock market today, Align shares crashed 23% and were trading near 195.30.
The Tempe, Ariz.-based company has made a name for itself with its clear teeth-straightening devices. But Chief Executive Joe Hogan says Align is facing "a more difficult macro environment" in the latter half of this year. Evercore ISI analyst Elizabeth Anderson said investors feared Align would miss profit and sales forecasts.
"Management also lowered the fourth-quarter guide, which seems sensible given the worse macro environment," she said in a report. But Anderson maintained her outperform rating and 320 price target on ALGN stock.
ALGN Stock Continues Its Dive
Align was a pandemic darling. But ALGN stock peaked in late 2021 and has mostly fallen since.
During the September quarter, Align earned $2.14 per share, on an adjusted basis, and reported $960.2 million in sales. Earnings per share climbed more than 31% but lagged forecasts by 12 cents. Sales rose almost 8% year over year, but came in below calls for $994.5 million, according to FactSet.
CEO Hogan noted deteriorating conditions at dentist offices, including decreased patient visits, increased cancellations and fewer orthodontic case starts overall, especially among adults.
"The September Gaidge report, which reflects more than 1,200 North American ortho practices, shows deceleration for orthodontic treatment with new orthodontic patient appointments down 8.7% year over year and ortho case starts were down 6.9% year over year — the biggest decrease in over a year," he said in a statement.
Evercore's Anderson noted that total Invisalign cases shipped were in line with estimates at 602.3 million. And cases shipped to teens increased more than 8% to 221,800.
Guidance Handily Misses Forecasts
But Align trimmed its outlook for the fourth quarter. The company now expects $920 million to $940 million in sales.
"We expect both clear aligner and systems and services revenues to be down sequentially reflecting a more challenging macro environment for doctors and patients with fewer orthodontic case starts overall, unfavorable foreign exchange rates given the strengthening of the U.S. dollar against key currencies and longer sales cycles for capital equipment purchases," the company said.
Align also doesn't expect any improvement in the number of adults using Invisalign, and for the average sales prices of Invisalign to drop due to exchange rate challenges.
The sales guidance was far below ALGN stock analysts' forecast for $1.02 billion.
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