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Dropping $ALGN from my selection of quality companies for now. Margin profile shows some cracks. Unsure about near term demand for high priced dental aligners. The recent stock drop is probably overblown, but I’m having a hard time estimating the intrinsic value with certainty.

Eric Messenger's avatar
I just went and did my “surface check”, as growth stocks don’t appear in my screens, I’m usually not familiar with their metrics or recent performance. So just have a question. I see their gross margins are high 70%, while net margins are only 16%. Is that something common with growth stocks that are still in that phase of growth where higher ratios of profits are reinvested, or is that symbolic of a red flag that needs further inspection? Since I’ve started paying more attention there I’ve came across a few companies with massive gulfs between gross & net and keep forgetting to try to figure it out when I have time to Google something.
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