William Blair analyst John Kreger says the “broad strength” seen in Align Technology’s Q3 results was overshadowed by a notable and “troubling” decrease in Invisalign average selling price, which he notes is expected to carry into Q4 and next year. While management was adamant lower selling prices were not driven by competitive pressures, investors will interpret the news “directly or indirectly a function of increased competition and compress the stock’s valuation as a result,” Kreger tells investors in a research note. He expects earnings estimates to come down but thinks the stock pullback today brings an “attractive entry point.” Kreger keeps an Outperform rating on shares of Align Technology.
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