What happened

Shares of Align Technology (NASDAQ:ALGN) were sinking 11.1% lower as of 3:48 p.m. EDT on Wednesday. The sharp decline for the orthodontic-device maker came after the World Health Organization (WHO) officially declared coronavirus disease COVID-19 a pandemic.

So what

In one sense, WHO's change in designation of COVID-19 from a "global health emergency" to a pandemic doesn't really matter to Align Technology. After all, the pandemic label simply confirms what many already knew: COVID-19 has rapidly spread across the world to a large number of people.

Hand holding clear dental aligner with a reflection on the surface of a table

Image source: Getty Images.

But while many healthcare companies shouldn't be directly impacted very much by the viral disease, Align will be. It makes around 8% of total revenue in China. Concerns about the coronavirus outbreak already led the company to lower its first-quarter guidance in January. With COVID-19 now having a greater impact in countries across the world where Align does business, the company's sales could be affected even more than originally thought.

Correcting the misalignment of teeth isn't a top health priority for people. If the COVID-19 pandemic causes a recession and increased unemployment, consumers could curtail spending and choose to postpone purchasing Align's clear aligners.

Now what

For now, it's uncertain how much damage COVID-19 will have on the global economy. Align Technology's shares have already fallen more than 30% off the highs set earlier this year. It seems unlikely that the coronavirus outbreak will diminish the company's business prospects to the extent that its stock has dropped. Long-term investors could have an opportunity now to buy Align Technology at an attractive valuation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.