Why Align Technology, Spirit Airlines, and LendingTree Slumped Today
Thursday wasn't a good day for the stock market, with investors seemingly giving up on their recent optimism and focusing on some of the things that could go wrong in the current economic and geopolitical environment. Major indexes were broadly lower in the wake of new fears that stimulative monetary policy in the U.S. and Europe might not prove sufficient to prevent a global recession. Meanwhile, many market participants were paying close attention to earnings, and some companies had disappointing reports that led to significant share-price declines. Align Technology (NASDAQ: ALGN), Spirit Airlines (NYSE: SAVE), and LendingTree (NASDAQ: TREE) were among the worst performers. Here's why they did so poorly.
Shares of Align Technology plunged 27% after the orthodontic device specialist released its second-quarter financial results. Growth for the period was actually reasonably robust, with top-line gains of 22.5% helping to lift earnings per share by more than 40% compared to the year-earlier quarter. International growth remained solid, with a 37% rise in shipments showing the increasing demand for Align's devices abroad. Yet even that strong growth wasn't as much as what some investors wanted to see. More importantly, Align is nervous about its expansion prospects in China, and extremely conservative third-quarter guidance suggested that earnings could actually fall next quarter -- not at all what growth-conscious investors have become accustomed to seeing from Align.
Image source: Align Technology.
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