Social media platforms like Snap and Pinterest spiked on higher engagement this earnings season. Another stock company to benefit was orthodontic company Align Technologies (ALGN).
The maker of Invisalign has rallied more than 30 percent in the last month after beating every metric tracked by analysts. Those include earnings, revenue and margins. Management cited a successful “teen and mom-focused” ad campaign and “an uptick in consumer engagement from new social media influencers like Charli D’Amelio and Marsai Martin.”
D’Amelio is one of the top personalities on TikTok, with almost 100 million followers. Martin’s an ABC actress with more than 2 million fans on Instagram.
Their engagement, along with sponsorship of NFL teams like the Dallas Cowboys and Green Bay Packers, is helping ALGN’s clear braces take market share from traditional wire braces. The result was 118 percent growth in leads last quarter and a 26 percent growth among teenagers.
Growth Stock Comeback
ALGN has gained more than 250 percent from the March low.
The company appears to be a classic “growth” stock, with a unique and differentiated solution. That allows it to gain market share, even in a weak economy. Pakistani-American investment banker Zia Chisthi founded ALGN in 1997. His goal was to disrupt the traditional orthodontic industry with modern technology. The company’s edge was a nicer product, mass-customized for millions of patients.
It went public for $13 in January 2001. The first decade was a struggle because the share price was often mired in the single digits. It truly broke out in 2012 and proceed to gain more than 1,400 percent by mid-2018. Along the way it got added to the S&P 500.
An 18-month correction then erased two-thirds of its value before the shares bounced this March.
Going forward, analysts see ALGN’s revenue inching slightly higher this year. Then Wall Street expects a return to growth, with 2021 revenue estimated up about 34 percent.