Align Technology Stock Drops 25% on Lowered Guidance, Ratings Cuts
TheStreet
Shares of Align Technology (ALGN) - Get Report , the maker of 3D digital scanners and Invisalign teeth-straighteners, dropped 26% to $204.82 Thursday on downgrades, weak guidance and soft China sales.
The company on Wednesday night reported solid numbers but warned of weakness to come.
The San Jose, Calif., company reported second-quarter earnings of $147.1 million, or $1.83 a share, on revenue of $600.7 million, beating the consensus of $1.43 a share on revenue of $598 million, according to FactSet.
Align sees third-quarter earnings of $1.09 to $1.16 a share, lower than the year-ago quarter, on revenue of $585 million to $600 million. Analysts on average expected third-quarter profit of $1.45 a share on sales of $624 million, according to FactSet.
Price-target and rating cuts followed Align's lowered guidance.
It was downgraded to in line from outperform at Evercore ISI, with a price target of $220, down from $340. Evercore analyst Elizabeth Anderson said Align's growth is "in jeopardy (at least for the forseeable future)."
Anderson wrote to clients that the results were hurt by increased competition and a slowdown in Chinese consumer spending.
"The beginning of a structural shift in market dynamics is afoot" in a now "contested marketplace," Stephens analyst Chris Cooley wrote in a note, dropping his price target to $200 from $255 while maintaining an equal weight rating.
Robert W. Baird's Jeff Johnson lowered his price target to $259 from $336.
Among analysts surveyed by Bloomberg, 13 rate it a buy, five have holds and none have sell ratings.