SmileDirectClub scheduled to report after the close on Wednesday
SmileDirectClub (SDC) is scheduled to report results of its second fiscal quarter after the market close on Wednesday, August 12, with a conference call scheduled for 4:30 pm EDT. 1. GUIDANCE: In April, as SmileDirect extended its SmileShop closures until at least May 3, withdrew its FY20 guidance due to the COVID-19 pandemic and the widespread unpredictability of its impact on the company and the market that are outside of the company's control. Stifel analyst Jonathan Block said he believes five events can help drive the stock higher. Specifically, he pointed to upside to modest Street Q2 estimates; guidance that may exceed the Q3 bar; the company reiterating expectations for positive EBITDA in Q4; the pending launch of the company's wholesale initiative; and generally negative sentiment partially unwinding.
2. POISED TO INCREASE ACCESS: On June 25, Stephens analyst Chris Cooley initiated coverage of SmileDirectClub with an Overweight rating and $11 price target. The company's disruptive, direct-to-consumer model is poised to increase access and affordability of orthodontic care, and ultimately utilization, Cooley contended. He sees the stock's current "deep discount" relative valuation setting up an attractive risk/reward over the next 12 months, Cooley added.: 3. LAWSUITS: In May, SmileDirectClub filed a lawsuit in a Tennessee court against Comcast's (CMCSA) NBCUniversal and the company's NBC Nightly News program, seeking nearly $3B in damages for what it alleges were defamatory news reports about the company's treatment methods. SmileDirectClub's complaint claims that the reports from NBC News contained numerous errors and that the patients fabricated claims that the company's treatment caused them physical problems to "retaliate." 4. EXPANSION: On July 29, SmileDirectClub announced the launch of SmileDirectClub Teen. SmileDirectClub's new teen program, its solution for 75% of the 4M U.S. orthodontic cases, is ahead of schedule and should immediately benefit the company in Q3, Craig-Hallum analyst Alexander Nowak said. The program offers features that address the logistical challenge of teens: app-locator aligner case, lost aligner replacement, parent/teen notification alarms and video chat, added the analyst. He believes the offering is enough to convince families to trial SmileDirectClub instead of Align Technology's (ALGN) Invisalign or braces.
Additionally, on August 11, SmileDirectClub announced a partnership with Smile Brands Inc. and its 450 affiliated dental practices across 18 states. Earlier in the quarter, the company announced an international expansion into Singapore and Austria following its launches in the U.K., Ireland, Australia, New Zealand, and Hong Kong in 2019 and Canada in 2018.