To be fair, Align Technology didn't owe all of its gains last month to earnings. With the S&P 500 climbing 8% in January, the stock rose along with the broader market. But shares soared more than 12% on January 30 alone, the first trading day after its fourth-quarter release.
More specifically, Align's quarterly sales increased 26.7% to a company-record $534 million, translating to net income of $97.4 million, or $1.20 per share. Both figures arrived well above the company's own guidance, which called for revenue of $505 million to $515 million and earnings of $1.10 to $1.15 per share.
Management credited a combination of higher average selling prices and 31% volume growth from the company's flagship Invisalign products, and even stronger 55% sales growth from its iTero intraoral scanners.
Looking ahead to the first quarter of 2019, however, Align Technology predicts that revenue will climb to a range of $525 million to $535 million, marking decelerated year-over-year growth of 20% to 22%. On the bottom line, that should mean earnings per share of $0.78 to $0.84, down from $1.17 per share in the same year-ago period amid higher competition and as the company pursues international growth.
That said, given its post-earnings pop and with consensus estimates now predicting first-quarter earnings closer to $0.90 per share, it seems the market believes Align will extend its streak of outperformance to start 2019. If that turns out to be the case when all is said and done in Q1, I suspect Align Technologies stock will respond in kind.