Align Technology Inc. (NASDAQ: ALGN) stock plunged to a 3-year low of $161.39 on Monday as the global pandemic overshadowed its growth expectations. The investors remained concerned about the company’s future as performance outlook turns negative for the near and long-term despite bullish stock patterns.
The company’s primary goal has been to make Invisalign clear aligners brand a household name worldwide. Each year, the company has been investing $100 million in consumer marketing programs including TV, digital and social media, PR, event marketing as well as its Patient Concierge program.
Align remained confident about its iTero business as it is expected to continue to help drive its overall growth and increase the adoption of the digital platform with Invisalign treatment. The use of iTero scanners for Invisalign case submission continues to grow and remains a positive catalyst for Invisalign utilization.
The company continues to be cautious for the first quarter due to the increased risk associated with the spread of the Covid-19 or coronavirus outbreak. While the outlook includes the company’s best view of how the coronavirus will impact its business in the first quarter, it is difficult to predict and forecast the longer-term impact.
Align expects that like SARS and MERS before, in time this virus will be addressed, the markets will assume equilibrium, and its business in China will continue to grow. The timing of this is uncertain but the future growth opportunity for the company’s business in China is certain.
The company has been hit by the coronavirus outbreak as customers would be delaying their dental treatments. As being a global pandemic, Align is preparing to brace for the further slowdown and narrow margins in fiscal 2020. Also, investors believe that if the pandemic turns worse, then Align’s margins would turn negative.
The long-term prospects of the company have been clouded as the outbreak strengthens itself worldwide apart from revenue slowdown and rising costs. However, the company believes if the virus is contained then its future holds the stage for its way in growth recovery. Currently, the analysts suggested holding the stock for long-term gains.
The stock ended Monday’s regular session down 17.44% at $161.72. The shares have fallen over 35% in the past year and over 40% in the past month. This is below the 50-day moving average of $245.46 and the 200-day moving average of $240.96.
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