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Here's Why Align Technology Marched Higher Again Today

What happened

Shares of Align Technology, Inc. (NASDAQ: ALGN), an orthodontic-device company, rose about 10% during Friday's session. Record results released after the bell on Thursday should keep investors smiling all through the weekend.

So what

Just as the analysts who pick stocks for our premium services predicted long ago, Align Technology's Invisalign tooth-straightening system is becoming increasingly popular. In the second quarter, the company shipped a record-breaking 231,900 cases, 31% more than it shipped during the same period last year.

Image source: Getty Images.

The number of cases of the translucent braces shipped wasn't the only figure that rose during the three months ended June. Second-quarter revenue jumped 32.3% year on year to $356.5 million, which was 14.9% more than the company raked in during the first quarter of the year. All channels performed well, but investors were pleased to hear growth in the important teen segment was especially strong.

Now what

Align Technology's braces might be barely visible, but the company's success is getting noticed. Following today's spike, the stock is up 103.1% over the past year. At its new high price, the shares trade at about 53 times this year's earnings expectations.

Although the stock might be trading at a sky-high multiple, there's probably more than enough demand to keep sales rising by double digits each quarter for years to come. Around the world, about 2.6 million patients with mild to moderate malocclusion have their teeth realigned by some means. These are the people best suited to treatment with the Invisalign system, but the potential market could be much larger.

The Invisalign system isn't anything like the metal-mouth image that usually comes to mind when people hear the word "braces." There could be a billion adults who want straighter teeth but don't want to broadcast it to their peers; Align's system is extremely discreet. I wouldn't be surprised if sales continue bursting for years to come.

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Cory Renauer has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.