After a nearly 60-percent return since the start of 2017, analysts at Leerink see further upside in shares of Align Technology, Inc. ALGN, a marketer and seller of digital services used in dentistry, orthodontics and dental records storage.
Leerink's Richard Newitter maintains a Buy rating on Allign's stock with a price target boosted from $149 to $194 after hosting a conference call with two specialists to discuss the company's Invisalign product which is a clear alternative to metal braces for adults and teens. One of the orthodontists is a West Coast-based high-volume Invisalign user who performed 400 case starts in 2016 and the other is an East Coast-based orthodontist with 100 case starts in 2016.
Both experts are expecting an increase in Invisalign case starts of 20–25 percent year over year, and patient volumes have been "healthy" since the start of the year, Newitter noted. Both specialists also indicate they will be increasing the adoption of Invisalign over the next one to two years as quickly as possible, albeit from different starting points.
The West Coast orthodontist also stated that more than 60 percent of all patients opted for the Invisalign product over the past 12 months, which marks an increase from around 35–40 percent in the prior year. The orthodontist is now targeting an adoption rate of 80 percent over the next year and is in fact charging more for traditional braces to incentivize patients toward Invisalign.
Bottom line, the feedback received from the two specialists merely reinforces the analyst's already bullish stance but adds further conviction that utilization rates can continue to accelerate within the large and underpenetrated North American aligner market.
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