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What's in Store for SmileDirectClub's (SDC) Q4 Earnings?

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SmileDirectClub, Inc. SDC is scheduled to report fourth-quarter 2019 results on Feb 25, after market close.

Despite surging operating expenses, the company is likely to have gained from a strong international presence.

SmileDirectClub delivered a positive earnings surprise of 10.1% in the last reported quarter. The average trailing four-quarter positive surprise was also the same.

Q4 Estimates Picture

For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $198.5 million. The same for adjusted earnings per share is a loss of 9 cents.

Let’s delve deeper.

Factors to Note

SmileDirectClub enjoys a strong international presence, which is likely to have aided fourth-quarter revenues.

Outside the United States, SmileDirectClub has a wide presence across Canada, Australia, the United Kingdom, New Zealand and Ireland. The company’s efforts to further expand internationally, driven by a broad array of products, are expected to reflect on results for the quarter to be reported.

SmileDirectClub, Inc. Price and EPS Surprise


SmileDirectClub, Inc. Price and EPS Surprise

SmileDirectClub, Inc. price-eps-surprise | SmileDirectClub, Inc. Quote

Management is upbeat about a series of product launches including retainers, lip balm, bright on premium whitening and an LED accelerator light. Also, last July, the company had launched the nighttime-only Clear Aligner product. Management is also optimistic about SmileDirectClub’s SmileShop rollout. These are expected to have driven its fourth-quarter revenues.

That’s not all. The company’s retail partnership agreements aided it in commercializing products. For instance, retail arrangements with CVS Health (CVS - Free Report) and Walgreens in the United States, Chemist Warehouse in Australia, and Shoppers Drug Mart in Canada deserve mention. These are expected to reflect on the to-be-reported quarter’s results.

However, management expects to have incurred incremental legal expenses in the fourth quarter, which might have pushed up operating costs. This is likely to have impacted margins.

Earnings Whispers

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. This is not the case here as you will see below.

Earnings ESP: SmileDirectClub has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Nevro Corp. NVRO has an Earnings ESP of +3.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tandem Diabetes TNDM has an Earnings ESP of +86.44% and a Zacks Rank #2.

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