A significant driver of top-line growth: SmileDirectClub Inc. (SDC)

SmileDirectClub Inc. (NASDAQ: SDC) stock jumped 6.44% on Monday to $0.57 against a previous-day closing price of $0.54. With 4.01 million shares changed hands, the volume of the stock remained heavier than its average volume of 2.65 million shares. During the session, the Medical Devices company that operates in wider Healthcare sector, reached to the highest price of $0.5900 whereas the lowest price it dropped to was $0.5200. The 52-week range on SDC shows that it touched its highest point at $3.10 and its lowest point at $0.31 during that stretch. Beta for the stock currently stands at 2.05.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SDC was down-trending over the past week, with a drop of -18.81%, but this was up by 62.50% over a month. Three-month performance dropped to -29.38% while six-month performance fell -48.00%. The stock lost -72.37% in the past year, while it has gained 62.41% so far this year. A look at the trailing 12-month EPS for SDC yields -0.78 with Next year EPS estimates of -0.53. For the next quarter, that number is -0.22. This implies an EPS growth rate of -21.30% for this year and 29.30% for next year.

Float and Shares Shorts:

At present, 121.16 million SDC shares are outstanding with a float of 117.62 million shares on hand for trading. On Oct 13, 2022, short shares totaled 22.99 million, which was 18.97% higher than short shares on Sep 14, 2022. In addition to Mr. David B. Katzman as the firm’s CEO & Chairman, Mr. Alexander J. Fenkell serves as its Co-Founder & Director.


Institutional Ownership:

Through their ownership of 29.20% of SDC’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 7.62% of SDC, in contrast to 17.64% held by mutual funds. Shares owned by individuals account for 15.04%. As the largest shareholder in SDC with 7.96% of the stake, The Vanguard Group, Inc. holds 9,690,489 shares worth 9,690,489. A second-largest stockholder of SDC, Prentice Capital Management LP, holds 4,597,666 shares, controlling over 3.78% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SDC, holding 1,468,150 shares or 1.21% stake. With a 2.95% stake in SDC, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 3,592,430 shares are owned by the mutual fund manager. The Vanguard Extended Market Index Fu, which owns about 1.25% of SDC stock, is the second-largest Mutual Fund holder. It holds 1,523,499 shares valued at 0.54 million. Vanguard Small Cap Index Fund holds 1.16% of the stake in SDC, owning 1,412,359 shares worth 0.5 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SDC since 7 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SDC analysts setting a high price target of $1.00 and a low target of $0.50, the average target price over the next 12 months is $0.73. Based on these targets, SDC could surge 75.44% to reach the target high and fall by -12.28% to reach the target low. Reaching the average price target will result in a growth of 28.07% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SDC will report FY 2022 earnings on 02/27/2024. Analysts have provided yearly estimates in a range of -$0.68 being high and -$0.76 being low. For SDC, this leads to a yearly average estimate of -$0.72. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. SmileDirectClub Inc. surprised analysts by $0.06 when it reported -$0.15 EPS against a consensus estimate of -$0.21. The surprise factor in the prior quarter was -$0.01. Based on analyst estimates, the high estimate for the next quarter is -$0.20 and the low estimate is -$0.22. The average estimate for the next quarter is thus -$0.21.

Summary of Insider Activity:

Insiders traded SDC stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 10,000 shares were bought while 31,992 shares were sold. The number of buy transactions has increased to 12 while that of sell transactions has risen to 2 over the past year. The total number of shares bought during that period was 6,735,658 while 132,277 shares were sold.

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