SmileDirectClub Fails To Give Investors Any Reason To Smile

SmileDirectClub Inc’s SDC stock plummeted after the company reported its third-quarter revenue at $137.68 million, down 18.3% year-on-year, missing the consensus estimate of $181.90 million.

BofA on SmileDirectClub: Analyst Michael Ryskin of BofA Securities maintained an Underperform rating, while reducing the price target from $6 to $5.

“Across most line items, 3Q came in well-below expectations, driven by substantially more pronounced impact from macro headwinds, similar to challenges in 2Q,” Ryskin wrote in the note.

“SDC seems to have little control over its ability to drive demand in the immediate term as it cut its FY21 top-line guide to $630-$650mn (vs $750-$800mn prior), and visibility is also challenged,” the analyst said. “Either way, inflationary pressures seem unlikely to abate in the near-term, and the direction the business is heading only seems less certain, in our view,” he added.

Stephens on SmileDirectClub: Chris Cooley of Stephens reiterated an Equal-Weight rating, while keeping the price target unchanged at $11.

“SDC has now missed consensus materially for two consecutive quarters and will likely have to exhibit consistent execution prior to the Street "buying in" to the promise of the teledentistry model,” Cooley said in the note to clients.

SDC Price Action: Shares of SmileDirectClub had tumbled by 22% to $4.10 at the time of publication Tuesday.

Photo: Courtesy SmileDIrectClub