Align Technology, Inc. (NASDAQ:ALGN)

CAPS Rating: 4 out of 5

The Company designs, manufactures and markets the Invisalign system, a proprietary method for treating malocclusion, or the misalignment of teeth.

Recs

3
Player Avatar kingrimreaper (81.94) Submitted: 12/5/2007 1:06:14 AM : Underperform Start Price: $17.51 ALGN Score: -175.55

There is no reason for this to be going up. First of all it is an elective procedure that is only FDA approved for people over 18, adults, not your typical population for braces, so insurace don't cover it at all. It is more expensive than traditional braces. It takes longer than traditional braces to correct problems. The users must wear these plastic mouthpieces all day every day unless you are eating (this limits treatment success because it is hard for anyone to wear these 24/7, no mater what the company tells you. Lastly, it is usually required to shave in-between teeth to achieve the desired result.

Now the Fundies: The company trades at an astounding P/E ratio. It has warned about future earnings. The CFO resigned. Cramer gave it a big "thumbs up."

This pig is being bought by the poor sappy dentists who pay a few grand for ALGN's course and think that they will be able to talk their patients into doing the treatment. Once they see that the treatment is not as successful as the company says it is, they stop doing the cases. Or better yet, wait until a few lawsuits hit the newspapers. They will be coming as it usually takes two years to complete treatment and it is just about due for a few lawsuits.

Member Avatar scottandsue (< 20) Submitted: 2/2/2010 11:03:20 PM
Recs: 2

I am a practicing orthodontist (orthodontics requires an advanced specialty degree beyond dentistry) and I couldn't agree more. I have to use braces to finish approximately 40% of my invisalign cases. I could bore you to death about the technical issues so I will talk more about the business issues. I practice in a very affluent area in Northern California and I have seen my adult cases plummet in the 2nd half of last year. For example in 2008 I had to do 25 invisalign cases to be called a "premiere provider." With some hussle I did this! 2009 I had eight as of July and ended the year with 8! I am in an area which is prime for invisalign, high disposable income, and large adult population yet my adult practice is imploding ( and my colleagues/competitors are complaining of the same thing). I don't quite understand how they shipped more cases. There latest maneuver is to try and force dentist to complete 10 cases/year or take away their "invisalign license." There are several people up and arms about this and until recently I did not think that this would affect me but the way it is going it very well may.

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