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SmileDirectClub (SDC) Struggles With New Markets, High Debt
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SmileDirectClub, Inc. is currently grappling with issues like escalating operating expenses, a leveraged balance sheet, and a tough competitive landscape. Currently, SmileDirectClub carries a Zacks Rank #4 (Sell).
Over the past year, shares of SmileDirectClub have underperformed the broader industry. The stock has declined 50.4% against the industry’s 34.2% rise.
The company’s second-quarter adjusted loss was wider than the Zacks Consensus Estimate. Financing revenues were flat. The company’s business is struggling in new international markets. Particularly some of its larger markets like Germany and Spain have felt the lingering effects of COVID-19.
SmileDirectClub’s second-quarter marketing and selling expenses rose 177.9%. General and administrative expenses were also up 23.8% year over year. The company incurred an adjusted operating loss of $52.7 million in the reported quarter.
A highly leveraged balance sheet is an added woe. Operating cash flow in the quarter was a negative $28.3 million. Free cash flow for the second quarter was a negative $51 million.
However, realizing the enormous prospects of teledentistry space, SmileDirectClub is currently providing a doctor-directed digital end-to-end experience in teledentistry with 24/7 access to orthodontic care and Lifetime Smile Guarantee program. The company continues to see favorable industry dynamics with broader acceptance of telehealth and specifically, teledentistry.
In terms of retail partnerships, SmileDirectClub’s oral care products are now available at over 12,500 retail stores nationwide, including Walmart, CVS, Walgreens, and Sam's Club. In March 2021, SmileDirectClub announced its plan to continue the company’s international expansion with a launch in Mexico, thus looking to enter Latin America.
Its prospects in tele-dentistry and its strategically aligned retail and insurance partnerships are major upsides.
Image: Bigstock
SmileDirectClub (SDC) Struggles With New Markets, High Debt
SmileDirectClub, Inc. is currently grappling with issues like escalating operating expenses, a leveraged balance sheet, and a tough competitive landscape. Currently, SmileDirectClub carries a Zacks Rank #4 (Sell).
Over the past year, shares of SmileDirectClub have underperformed the broader industry. The stock has declined 50.4% against the industry’s 34.2% rise.
The company’s second-quarter adjusted loss was wider than the Zacks Consensus Estimate. Financing revenues were flat. The company’s business is struggling in new international markets. Particularly some of its larger markets like Germany and Spain have felt the lingering effects of COVID-19.
SmileDirectClub’s second-quarter marketing and selling expenses rose 177.9%. General and administrative expenses were also up 23.8% year over year. The company incurred an adjusted operating loss of $52.7 million in the reported quarter.
A highly leveraged balance sheet is an added woe. Operating cash flow in the quarter was a negative $28.3 million. Free cash flow for the second quarter was a negative $51 million.
However, realizing the enormous prospects of teledentistry space, SmileDirectClub is currently providing a doctor-directed digital end-to-end experience in teledentistry with 24/7 access to orthodontic care and Lifetime Smile Guarantee program. The company continues to see favorable industry dynamics with broader acceptance of telehealth and specifically, teledentistry.
SmileDirectClub, Inc. Price
SmileDirectClub, Inc. price | SmileDirectClub, Inc. Quote
In terms of retail partnerships, SmileDirectClub’s oral care products are now available at over 12,500 retail stores nationwide, including Walmart, CVS, Walgreens, and Sam's Club. In March 2021, SmileDirectClub announced its plan to continue the company’s international expansion with a launch in Mexico, thus looking to enter Latin America.
Its prospects in tele-dentistry and its strategically aligned retail and insurance partnerships are major upsides.
Key Picks
A few better-ranked stocks from the broader medical space include Henry Schein, Inc. (HSIC - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) , and Envista Holdings Corporation (NVST - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Henry Schein has a long-term earnings growth rate of 13.9%.
IDEXX has a long-term earnings growth rate of 19.9%.
Envista Holdings has a long-term earnings growth rate of 27.4%.