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SmileDirectClub (SDC) Reels Under Cyber Attack, Pandemic Woes
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At present, operating loss, leveraged balance sheet and a tough competitive landscape are major overhangs for SmileDirectClub, Inc. . The stock currently carries a Zacks Rank #4 (Sell).
Over the past three months, shares of SmileDirectClub have underperformed the industry. The stock has declined 15.1% against the industry’s 5% rise. The company’s first-quarter adjusted loss was wider than the Zacks Consensus Estimate.
Financing revenues (interest associated with SmilePay program)in the first quarter of 2021 were down 15.7% year over year. Further, the company incurred operating loss in the quarter. In terms of balance sheet, operating cash flow was negative $28.3 million. Free cash flow for the first quarter was negative $51 million.
We are also apprehensive about the impact of the recent systems outage caused by a cyber attack. The company apprehends this incidence to have an adverse impact on its second-quarter revenues to the tune of approximately $10-$15 million.
On a positive note, strong product line, growth across teledentistry space, and strategic retail and insurance partnerships boost our confidence on the stock for long-term growth.
Realizing enormous prospects of teledentistry space, SmileDirectClub has extended its teledentistry platform to dental and orthodontic offices through a collaborative model. The company is currently providing a doctor-directed digital end-to-end experience in teledentistry, with 24/7 access to orthodontic care and the back end of lifetime smile guarantee. The company continues to see favorable industry dynamics with broader acceptance of telehealth and specifically, teledentistry.
SmileDirectClub’s long-term strategy includes achieving average revenue growth target of 20% to 30% per year. Prior to the cyber-attack-led revenue guidance update, the company’s Q2 expectation was in line with its long-term target.
Key Picks
A few better ranked stocks from the Medical-Products industry include PetIQ, Inc. (PETQ - Free Report) , National Vision Holdings, Inc. (EYE - Free Report) and Envista Holdings Corporation (NVST - Free Report) .
National Vision Holdings, which carries a Zacks Rank #1, has a long-term earnings growth rate of 23.00%.
Envista Holdings, which carries a Zacks Rank # 2 (Buy), has a long-term earnings growth rate of 26.40%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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SmileDirectClub (SDC) Reels Under Cyber Attack, Pandemic Woes
At present, operating loss, leveraged balance sheet and a tough competitive landscape are major overhangs for SmileDirectClub, Inc. . The stock currently carries a Zacks Rank #4 (Sell).
Over the past three months, shares of SmileDirectClub have underperformed the industry. The stock has declined 15.1% against the industry’s 5% rise. The company’s first-quarter adjusted loss was wider than the Zacks Consensus Estimate.
Financing revenues (interest associated with SmilePay program)in the first quarter of 2021 were down 15.7% year over year. Further, the company incurred operating loss in the quarter. In terms of balance sheet, operating cash flow was negative $28.3 million. Free cash flow for the first quarter was negative $51 million.
We are also apprehensive about the impact of the recent systems outage caused by a cyber attack. The company apprehends this incidence to have an adverse impact on its second-quarter revenues to the tune of approximately $10-$15 million.
SmileDirectClub, Inc. Price
SmileDirectClub, Inc. price | SmileDirectClub, Inc. Quote
On a positive note, strong product line, growth across teledentistry space, and strategic retail and insurance partnerships boost our confidence on the stock for long-term growth.
Realizing enormous prospects of teledentistry space, SmileDirectClub has extended its teledentistry platform to dental and orthodontic offices through a collaborative model. The company is currently providing a doctor-directed digital end-to-end experience in teledentistry, with 24/7 access to orthodontic care and the back end of lifetime smile guarantee. The company continues to see favorable industry dynamics with broader acceptance of telehealth and specifically, teledentistry.
SmileDirectClub’s long-term strategy includes achieving average revenue growth target of 20% to 30% per year. Prior to the cyber-attack-led revenue guidance update, the company’s Q2 expectation was in line with its long-term target.
Key Picks
A few better ranked stocks from the Medical-Products industry include PetIQ, Inc. (PETQ - Free Report) , National Vision Holdings, Inc. (EYE - Free Report) and Envista Holdings Corporation (NVST - Free Report) .
PetIQ,currently sporting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 25.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.
National Vision Holdings, which carries a Zacks Rank #1, has a long-term earnings growth rate of 23.00%.
Envista Holdings, which carries a Zacks Rank # 2 (Buy), has a long-term earnings growth rate of 26.40%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>