SmileDirectClub Inc. (SDC) Competition Increasing with XRAY's Byte Deal - BofA Securities
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BofA Securities analyst Michael Ryskin reiterated the Underperform rating raised the price target on SmileDirectClub Inc. (NASDAQ: SDC) after Dentsply Sirona (NASDAQ: XRAY) announced the acquisition of Byte, a direct-to-consumer (DTC) clear aligner competitor to SmileDirectClub (SDC). Byte was considered one of the upper echelons of the DTC clear aligner participants after SDC (along with Candid).
The analyst stated "While XRAY already has their own clear aligner offering (SureSmile in-office solution), the Byte deal significantly increases their scale, bringing combined clear aligner revenues to run-rate in excess of $300mn by end of 2021 ($200mn Byte, $100mn SureSmile). Importantly, we see the acquisition by XRAY as bolstering and expanding Byte’s R&D, supply chain, and global footprint, compared to what the company would’ve been able to achieve on its own." He went on to state "longer term, we see Byte as an incrementally stronger competitive within XRAY".
So why the PT increase to $8.00 (from $7.00)? Just the model roll to 2022 estimates with a consistent multiple of 3x EV/Sales.
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