The 10-second takeaway
For the quarter ended March 31 (Q1), Align Technology beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share improved significantly.
Gross margin contracted, operating margin dropped, and net margin expanded.
Align Technology booked revenue of $135.1 million. The 10 analysts polled by S&P Capital IQ expected a top line of $128.5 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $104.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.27. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.21 per share on the same basis. GAAP EPS of $0.26 for Q1 were 30% higher than the prior-year quarter's $0.20 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 74.6%, 380 basis points worse than the prior-year quarter. Operating margin was 20.7%, 80 basis points worse than the prior-year quarter. Net margin was 15.5%, 40 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $138.5 million. On the bottom line, the average EPS estimate is $0.28.
Next year's average estimate for revenue is $555.8 million. The average EPS estimate is $1.13.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 173 members out of 220 rating the stock outperform, and 47 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 $29.00.
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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.