Stephens Asks Whether Invisalign Maker's Best Days Are Waning

(Bloomberg) -- Align Technology Inc., the maker of Invisalign teeth straighteners, could be in danger of ending its streak of beating its own forecast for case shipments.

Stephens analyst Chris Cooley said that trend, which goes back more than three years, could be in jeopardy if a software glitch in its ClinCheck processing software during the second quarter led to too many delays.

Even worse, “select clinicians are migrating away from aggressively recommending” the company’s Invisalign Teen product because of “non-compliance issues,” which could hurt growth in the second half of this year and beyond, Cooley wrote in a note previewing Align’s earnings on Wednesday.

He has a hold-equivalent rating on the stock and a $255 price target, the lowest among analysts tracked by Bloomberg. Shares of Align have fallen around 30% since trading at a 52-week high close to $400 in September.

Analysts expect Align will report about 383,600 total cases shipped, based on Bloomberg MODL estimates, compared with the company’s forecast of 380,000 to 385,000.

As Align faces increasing competition that could pressure prices and margins, Cooley said the company’s growth trajectory may be cooling. “How does it get any better than this?,” he wrote on Tuesday.

To contact the reporter on this story: Jeremy R. Cooke in Mount Pleasant, S.C. at jcooke8@bloomberg.net

To contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.net

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