Even after losing nearly 65% of its market value in the first half, Align Technology Inc. (ALGN, Financial) still doesn’t look like anything approaching a buy. The Phoenix-area company has earned the dubious distinction of leading the steep decline in the number of medical device vendors in the first six months of 2022, according to healthcare consulting firm Evaluate. . In total, space companies have seen their value reduced by half a trillion dollars.
Evaluate has been tracking the performance of stocks in the sector since 2013, and Align is the first large-cap company to lose more than half its value. The stock is currently trading at $247.18, light years from its year-to-date peak of over $737. The company has its supporters; all 11 analysts offering opinions rate the stock as a buy or strong buy with an average price target of $429, Yahoo Finance reported. What’s somewhat confusing – and probably a bad sign – is that the stock is trading below its low target price.
As long as inflation remains high, Align’s chances of turning the tide remain low. The mainstay of the company is Invisalign, the invisible dental appliance for children, teenagers and adults. Since the treatment is cosmetic, the vast majority of patients have to pay out of pocket and many are reluctant to do so as their disposable income is eaten away by the rising prices of basic necessities.
Caption: Align Technology shareholders saw the value of their investment drop 65% in the first half of the year.
In Q1 2022, Align shipped 5% fewer Invisalign cases compared to Q4 2021, continuing its decline. Shares of the Swiss company Straumann Holding AG (XSWX:STMN, Financial) were also penalized as demand for its competitor product Clear Correct also declined. The easing of the pandemic also has something to do with the declines. When Zoom calls were all the rage, people were much more sensitive to how they looked in face-to-face electronic meetings.
If misery loves company, Align and Straumann investors have plenty. The first six months of 2022 were the worst six months for Medtech stocks in the last 10 years, as the companies lost around half a trillion dollars in value. A single outlier in the sector with a market capitalization above $10 billion recorded a rise in the share price during the first half of the year.
Investors are probably wise to steer clear of these stocks because there doesn’t appear to be any slowing in inflation in the near term, which means people will be reluctant to spend on medical devices in the event that money comes out of their pockets. pockets.
Sysmex Corp. (SSMXY, Financial), down 47%, Dexcom Inc. (DXCM, Financial), which fell 45%, and Intuitive Surgical Inc. (ISRG, financial), having fallen by 44%.