- Speaking at a Wharton Investment Management Alumni Reunion event, noted investor Whitney Tilson presented his case that there is 50% downside risk in Align Technology (ALGN +1.7%). Main points:
- Key patents that have kept competitors at bay have expired and will expire next month. Downward pressure on prices will result.
- The Street is valuing the company like a medtech, ignoring the commodity nature of clear aligners.
- Dentists can produce aligners in-house for $30K - 50K in upfront costs (3D printer) and $100/aligner compared to $1,800/aligner from ALGN.
- Investors, at the moment, do not seem to share Mr. Tilson's pessimism.
- The company will release Q1 results tomorrow, April 24, after the close. Consensus view is EPS of $0.83 on revenue of $530.4M.