SmileDirectClub, Inc.

SmileDirectClub, Inc. (NASDAQ: SDC) is a dental company that developed a Medtech platform for teeth straightening. The Company's network of doctors has hired the Company to provide various non-clinical administrative support services, including access to and use of its SmileCheck platform. Its SmileCheck platform is a hub for all medical records, business transactions, and member communications. SmileCheck has an online portal that allows you to access your treatment plan information from anywhere. The Company's aligner treatment is aimed at the orthodontics market.

Key Highlights

• The company reported YoY decline of 2.92% in net revenue to USD 637.61 million in FY21 (ended December 31, 2021) compared to USD 656.78 million in FY20.
• SDC net loss increased to USD 335.65 million in FY21 vs. USD 278.50 million in FY20.
• As of December 31, 2021, the company had cash and cash equivalents of USD 224.86 million and outstanding debt of USD 740.97 million.
• Its ROE was -42.7% in FY21, whereas the industry median stood at 4.7%.
• Relatively high gross margin 72.1% in FY21 vs. industry median of 68.1%.
• On March 24, 2022, Following the accelerated adoption of telehealth during the pandemic, a recent survey of 1,000 U.S. consumers commissioned by SDC found that consumers want telehealth services to continue. According to the survey, patients benefit from telehealth for a variety of reasons, including more accessible access to their doctor, flexible scheduling, more time back in their day, and more affordable care options.
• Stock is currently trading between its crucial short-term (50-day) and long-term (200-day) SMA support levels.
• The stock is leaning towards the lower end of its 52-week range of USD 1.76 to USD 11.75.

Conclusion: Considering the company’s flat topline, expansion of losses, technical indicators, and associated risks, we recommend a "Watch" rating on the stock at the current price of USD 2.545, down 3.96%, as of April 05, 2022, at 10:27 AM PDT.

Technical Price Chart (as on April 05, 2022, at 10:27 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Current price as of April 05, 2022, at 10:27 AM PDT

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.