DentalUpdateSurveySays:DentalDemandSeeminglyStableLifeScienceToolsandDiagnostics|ChannelCheck■4QDentalPracticeVolume,RevenueGrowthModestlyImproves:Accordingtoourproprietarysurveyof75USdentalpractitioners,54%ofpracticesexperiencedpositiverevenuegrowthin4Q,rising1.1%(weightedavg.),aslightsequentialaccelerationfromour3Qsurvey(+1.0%).Newpatienttraffic(+1.6%)wasthemostmeaningfuldriverofpracticerevenues,followedbybridgesandimplants(+1.3%),preventative(+1.0%),andacutevisits(+1.0%).RespondentsremainoptimisticonNTMtrendswith68%expectingimprovedpracticevolume,aniceimprovementfromthe3Qexperience(64%),withpracticevolumeexpectedtogrow+2.0%,aheadofthe3Qexperience(+1.9%).Whilethetrendsindicatenomeaningfulturnaroundindentaldemand,weareencouragedbythestability,providingabarometerofperformanceforourdentalcoverageuniverse,consistentwithourQTDconversationswithindustryconstituents(seeGNYDentalSummitnote).■Equipment—DigitalDentistryDriversinInnovation:TheNTMoutlookonequipmentpurchasingwasessentiallyin-linewith3Q,pointingtosustainedhealthiertrendsrelativetoFY18/1H19,albeitwithpractitionersstilllikelywaryoflargercashoutlaysonbroadermacroconcerns,reimbursementpressures,andDSOcompetition.WemaintainourpositivethesisonDentsplySirona(XRAY,OP)amidstaturnaroundstoryas2019productlaunchesofferupsideto2020estimatesonpotentiallyacceleratingtraction.WhileXRAY’sPrimescanofferingclearlyremainsinearlydaysofadoption,withpricingpotentiallyactingasadeterrenttobroadermarketpenetration,weareoptimisticonitsrecentlylaunchedupgradeprogram,whichshouldspurfurtherdemand,whilealsopromotingconsumablessales.ItsOneDSupgradeprogramenrollmenthasexceededinternalforecasts(1.5xdentistsvs.plan),andbroaderpractitionerrecognitionoftheprogramwasrespectable(24%),basedonoursurvey,andweviewgreaterawarenessshouldsupportgrowthovertime.ForAlignTechnology(ALGN,OP),itsiTeroremainedtheleadingintraoralscanner(16%oftotalrespondents;48%ofdigitalimpressionusers).Note,ALGNcontinuestopriceitsiTerolowerthancompetitiveofferings.■ClearAl...
