SmileDirectClub

0.29 (3.26%)

NASDAQ:SDC | Last traded on 11-15-2019 4:00 PM

Market Reaction

Offer Price

$22

Today Open Price

$9.05

Change Since IPO

Market Cap

$3.2B

Day High

$9.13

Day Low

$8.52

View Stock Chart

Featured Analysis

"The firm’s financials show sharply increased revenue and gross profit, but at slower rates of growth than previously. SDC is not yet at operating break-even, although its negative operating margin has been trending significantly lower and is on a favorable path. However, the company is burning through cash at an ever-increasing rate, so management appears to be ‘buying’ its growth rate through increased use of cash as the firm’s sales & marketing efficiency is dropping, so marginal revenue is becoming more expensive. The market opportunity for SDC’s DTC model for dental services is an intriguing one. The company has come under some criticism in the press for this as competitive firms question whether patients can be safely served by the firm’s telemedicine and retail store model. As to valuation, management is seeking an enterprise value of $8 billion. Compared to competitor Align Technology (ALGN), SDC is asking investors to pay roughly double ALGN’s Price/Sales and EV/Revenue, while generating negative EBITDA and earnings. While SDC’s growth rate is significantly higher, the firm’s negative operating and net results, extremely high and growing cash burn, reduced marketing efficiency and high valuation expectations lead me to believe this IPO is overpriced." - Donovan Jones, CEO VentureDeal.com

Company Data

Location

Nashville, TN

Valuation

$1.4B

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Founded

2014

Total Shares Offered

67,317,550

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Employees

5000

IPO Date

2019-09-12

Background Information

SmileDirectClub was founded on one simple belief: everyone deserves a smile they love. They are the industry pioneer as the first direct-to-consumer medtech platform for transforming smiles. Through their cutting-edge teledentistry technology and vertically integrated model, they are revolutionizing the oral care industry. Their clear aligner treatment addresses the large and under-served global orthodontics market. An estimated 85% of people worldwide suffer from malocclusion, yet less than 1% receive treatment annually. The company's goal is to improve penetration into this untapped market by democratizing access to a more affordable, convenient, and accessible solution for a straighter smile.

Financial Analysis

Years 2017 2018
Revenue growth -- 184%
Net profit margin -24%-19%
Valuation -- $8.9B
Revenue multiple -- 22x
Profit multiple ---106x

Financial Information

Income Statement ($M) 2017 2018
Revenue140398
Cost of goods sold64134
Gross profit82289
Total operating expense112335
EBIT(31)(46)
Pretax profit(33)(74)
Net income(33)(75)
Balance Sheet ($M) 2017 2018
Total current assets43442
Cash and cash equivalents4314
Total assets66555
Total current liabilities64117
Total liabilities100257
Total shareholder equity3490
Total liabilities and equity66555
Cash Flow Statement ($M) 20172018
Net cash from operating activities (30)(115)
Net cash from investing activities (10)(42)
Net cash from financing activities 38466
Net increase in cash and cash equivalents (2)310