UPDATE: Stifel Downgrades SmileDirectClub Inc. (SDC) to Hold
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(Updated - September 20, 2021 5:24 PM EDT)
Stifel analyst Jonathan Block downgraded SmileDirectClub Inc. (NASDAQ: SDC) from Buy to Hold with a price target of $7.00 (from $9.00).
The analyst commented, "To the moon? Crashing back to Earth? While we do not know the answer to these questions, we believe more headwinds than tailwinds are on the horizon for SDC, and as a result take the opportunity to move to the sidelines after the stock’s modest bump higher off post-2Q21 lows. We lay out our concerns below, which highlight market share losses both here/potentially abroad, trepidation around future growth opportunities, and the balance sheet. In short, it has been a rough ride for SDC’s stock, and we prefer to see signs of progress before revisiting a Buy-rating. Despite a solid clear aligner market, we need evidence that the unit economics work for SDC’s model (maybe price is a lever). Looking ahead, we would view progress toward hitting out-year EBITDA estimates as a sign of progress with our 2022E now standing at ($26MM) down from $89MM in early-2021 and IPO-estimates of $355MM."
Shares of SmileDirectClub Inc. closed at $6.70 yesterday.
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