Is a SmileDirectClub Inc. (SDC) correction on the way?

SmileDirectClub Inc. (SDC) released its quarterly report last week showing steady revenue and order growth. During trading on Friday, the company’s shares fell by -4.81%, reaching a low of $9.02 and ending the day at $10.51. A total of 18.7 million shares were traded during the trading session. The stock had traded at $10.09 in the last trading session.

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SmileDirectClub’s fourth-quarter revenue was more than $ 184 million, which is down 6 % from the same quarter the previous year but is up 10% from the third quarter. The net loss for the prior period was $ 33 million, which amounted to $ 0.09 per share. Based on the last financial year’s results, SmileDirectClub’s loss was over $100 million, or approximately $0.25 per share.

However, SmileDirectClub Inc. (SDC) has managed to supply almost 120,000 of its aligners despite the coronavirus pandemic. Compared to the previous year, this is about 12 % less, and 9 % more than the third quarter. Thus, a slow but steady recovery of the industry can be expected.

EBITDA improved by 137% in one year to $ 7 million – the indicator improved by the positive factor. SmileDirectClub is thus showing signs of recovery. Despite this, the company’s stock continues to fluctuate because of the overall market state. The value of the company has decreased by roughly 16% since the beginning of the year.

According to their forecast, SmileDirectClub’s first-quarter revenues are predicted to grow only a few percent compared to the fourth quarter. Additionally, the company still has a substantial marketing and sales investment that will eventually hurt the bottom line.

Among SmileDirectClub Inc. (SDC) strengths, the production model of SmileShop aligners is protected under patent for the next 18 years. A treatment plan is created using transparent aligners. Under this model, a patient receives a free facial scan, a dentist approves the treatment plan, aligners are manufactured, and aligners are delivered to the patient. It can potentially provide good results for the company as the number of dentist visits decreases with the advent of telemedicine and telemedicine services.

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