Fly News Breaks for February 26, 2020
Feb 26, 2020 | 07:44 EDT
JPMorgan analyst Robbie Marcus nearly halved his price target on SmileDirectClub to $16 from $31 while keeping an Overweight rating on the shares. The stock in premarket trading is down 23%, or $2.64, to $8.69. The company last night posted "disappointing" Q4 results with sales of $197M coming in $3M below consensus, Marcus tells investors in a post-earnings research note. The results were driven by a lower than expected level of aligner sales, due primarily to manufacturing issues limiting supply and delaying order shipment, says the analyst. Further, Marcus points out that sales guidance for 2020 came in softer than expected at $1.0B-$1.1B versus expectations for closer to $1.14B based on his conversations. Though a disappointing close to 2019, the issues that stifled Q4 growth are transient in nature due to manufacturing, rather than a demand issue, contends the analyst. He also sees paths to upside in 2020 as SmileDirectClub "continues to enter high-growth, low-penetration international markets, expands its portfolio of products, and enters new channels."
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