The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Align Technology met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share grew significantly.
Gross margins dropped, operating margins increased, net margins increased.
Align Technology logged revenue of $128.9 million. The nine analysts polled by S&P Capital IQ predicted sales of $127.8 million. Sales were 39% higher than the prior-year quarter's $92.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.28. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.22 per share on the same basis. GAAP EPS of $0.25 for Q4 were 106% higher than the prior-year quarter's $0.12 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 74.1%, 320 basis points worse than the prior-year quarter. Operating margin was 20.5%, 320 basis points better than the prior-year quarter. Net margin was 15.9%, 520 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $129.4 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $550.4 million. The average EPS estimate is $1.04.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 169 members out of 217 rating the stock outperform, and 48 members rating it underperform. Among 82 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 69 give Align Technology a green thumbs-up, and 13 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Align Technology is outperform, with an average price target of $24.25.
Over the decades, small-cap stocks like Align Technology have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Align Technology to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.