SmileDirectClub Posts Q2 Miss; Shares Fall 13% After-Hours

Shares of SmileDirectClub, Inc. (SDC) plunged almost 13% in Monday’s extended trading session. The price action followed the worse-than-expected Q2 results and below expectations FY2021 guidance reported by the dental care company, also known for its first med-tech platform for teeth straightening.

The miss was attributable to the negative impact of a cyber-attack in April, as well as the overall slowdown, especially in international markets due to the COVID-19 pandemic.

For FY2021, the company expects revenues to be in the range of $750 – $800 million, lower than the consensus estimate of $833.7 million. (See SmileDirectClub stock charts on TipRanks)

In Q2, an adjusted loss of $0.14 per share improved 44% year-over-year but lagged analysts’ expectations for a loss of $0.10 per share. The company reported an adjusted loss of $0.25 per share in the prior-year period.

Furthermore, revenues jumped 62.7% year-over-year to $174.2 million but fell short of consensus estimates of $198.45 million.

Furthermore, the adjusted EBITDA loss of $22 million increased by $2 million compared to the prior-year period.

SmileDirectClub CEO David Katzman commented, “We have a singular focus on maximizing our global opportunity and extending our leading telehealth platform for orthodontia through a persistent emphasis on customer experience, improving consumer perception around credibility, driving positive sentiment with our Challenger campaign, and investing in innovation.”

Credit Suisse analyst Erin Wright recently reiterated a Buy rating with a price target of $11 on the stock.

Overall, the stock has a Hold consensus rating based on 3 Buys, 2 Holds, and 2 Sells. The average SmileDirectClub price target of $11 implies 64.2% upside potential from current levels.

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