Benefit of Braces Without the Drawbacks Like it or not, looks matter in both personal and professional settings. Most people want nice looking teeth. InvisAlign offers the opportunity to get straighter teeth without the drawbacks of braces. Originally InvisAlign was created for dentists. However, once orthodontists saw the popularity of the product, they wanted to join the action. Because orthodontists are trained to move teeth, they are the preferred InvisAlign providers, but patients can get InvisAlign from both. Since InvisAlign hit the market in 2000, more than 5 million patients have received treatment. In 2018, InvisAlign shipped 1.2 million cases, up 31.9% year over year. Total revenue grew to $1.97 billion, and net profit was $4.92 per share. It's estimated that use of clear aligners have tripled over the last five years. Still, clear aligners represent only about 15% of the orthodontics market, suggesting plenty of growth runway ahead. Success Attracts Challengers However, the downside is that success attracts competitors. Imitation is the best form of flattery, but more competition is not good for business. Some of Align's patents have expired in the last few years and a number of startups are looking to challenge Align with cheaper, more basic versions. Align actually owns a 19% equity stake in its biggest challenger, private company SmileDirectClub (SDC). In 2016, Align agreed to supply the clear aligners for SDC. But the partnership has been rocky and the two companies won't renew the deal once it expires in 2019. SDC operates a direct-to-consumer model. Patients can take an impression of their teeth from home or from an SDC store and do their checkups remotely. The cost is lower but SDC treatment only works for mild cases. By contrast, InvisAlign requires an office visit and is more expensive, but it works for more complex cases. Tougher Climb Ahead Align is still the clear Number One, but there's more competition now. Last October, a bad fourth-quarter guidance sent the stock down 25% and the stock hasn't fully recovered. Even after the plummet, given the more uncertain growth outlook, the stock still looks expensive at more than 30-times projected forward-year earnings.
The company is still growing and should continue to grow because the clear aligners market still looks very good, but there's significant uncertainty. At least in mild patient cases, clear aligners are becoming commoditized. This means Align not only faces a tougher fight for market share, but it will encounter price pressure. Align still enjoys growth ahead and it's an appealing stock, but the days of exponential market-crushing gains could be behind it. Align's case shows that it's important to find a company with a breakthrough story... and invest early. My colleague Genia Turanova has the time-proven ability to do just that. Genia Turanova is the chief investment strategist of the trading service Fast-Track Millionaire. Genia knows how to pinpoint fledgling growth companies that are flying under the radar. She steers her followers to these "rocket stocks" before they blast off. Genia has found a little-known biotech that's in the forefront of medical innovation. This Swiss-based company is developing a gene-editing system that's about to revolutionize health care. The time to invest is now, before the Wall Street crowd catches on and bids up the share price. Click here for details. | 
