Why Align Technology Shares Are Nosediving Today

Align Technology Inc ALGN shares are trading significantly lower Thursday after the company reported weak Q1 financial results.
Align said Q1 FY22 revenues were $973.2 million, down 5.6% sequentially and up 8.8% Y/Y, below the consensus estimate of $996.59 million.
Clear Aligner revenues reached $809.7 million, down 0.7% sequentially and up 7.5% Y/Y. Volume declined 5.1% sequentially and up 0.5% Y/Y.
Imaging Systems and CAD/CAM Services revenues were $163.5 million, down 24.2% sequentially and up 15.6% Y/Y.
Operating income declined from $225.45 million to $198.1 million resulting in a margin of 20.4%, down from 25.2% a year ago.
Adjusted EPS of $2.13 missed the Wall Street estimate of $2.33.
Align Technology President & CEO Joe Hogan said, "Overall, the first quarter proved to be a tougher than expected operating environment globally.".
"We believe our results primarily reflect three factors: the continued impact of COVID-19 waves, a weaker economic environment and waning consumer confidence driven by increasing inflationary pressures and supply chain disruptions; and the military conflict in Ukraine and fallout across Europe," he added.
Analyst Assessment: Piper Sandler maintained an Overweight rating for Align and lowered the price target from $600 to $440.
Morgan Stanley kept an Overweight rating and lowered the price target from $575 to $524.
Baird lowered the price target from $625 to $510.
Price Action: ALGN shares are down 17.9% at $295.74 during the market session on the last check Thursday.

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