Align Technology (ALGN) closed at $617.39 in the latest trading session, marking a +1.91% move from the prior day. This move outpaced the S&P 500's daily gain of 0.58%.
Heading into today, shares of the maker of the Invisalign tooth-straightening system had gained 1.53% over the past month, lagging the Medical sector's gain of 2.01% and the S&P 500's gain of 2.17% in that time.
ALGN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.56, up 831.43% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $937.52 million, up 166.11% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.53 per share and revenue of $3.79 billion. These totals would mark changes of +100.57% and +53.42%, respectively, from last year.
Any recent changes to analyst estimates for ALGN should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.42% higher within the past month. ALGN currently has a Zacks Rank of #2 (Buy).
Digging into valuation, ALGN currently has a Forward P/E ratio of 57.53. For comparison, its industry has an average Forward P/E of 22.52, which means ALGN is trading at a premium to the group.
Investors should also note that ALGN has a PEG ratio of 2.48 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Medical - Dental Supplies stocks are, on average, holding a PEG ratio of 1.8 based on yesterday's closing prices.
The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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