SmileDirectClub plummeted 20% and is now at an all-time low following weak 3rd-quarter earnings
- SmileDirectClub reported third-quarter 2019 earnings on Tuesday, its first earnings release as a public company.
- Shares fell as much as 20% Wednesday after the company's reported deeper losses.
- The company has struggled to make market gains since its September IPO.
- Watch SmileDirectClub trade live on Markets Insider.
Shares of SmileDirectClub fell as much as 20% Wednesday following the company's third-quarter earnings release Tuesday, its first as a public company.
It's the largest-ever drop for the company since its September IPO, when its shares plunged 28% in one day. It also brought shares below $9, an all-time low. Even though the company beat Wall Street expectations on revenue, its losses widened in the quarter.
Here's what the company reported, versus what analysts surveyed by Bloomberg expected:
- Adjusted earnings per share: -89 cents loss reported, versus -87 cents loss (expected)
- Revenue: $180.2 million reported, versus $165.5 million (expected)
The company announced that for the full-year 2019, it expects revenue in the range of $750 million to $755 million, which represents growth of 78% year over year. The low end of the range fell below the $751 million Wall Street expected.
"Post-IPO, our team is laser focused on execution. Our results for the quarter, all of which exceeded management's expectations, are a testament to the strength and momentum of the underlying business," said Kyle Wailes, SmileDirectClub's CFO, in a release.
In addition, the company expects adjusted Ebitda loss for the fiscal year to be between $73 million and $80 million. On a call with analysts, Wailes said that the company was continuing to make "significant strategic investments," which contributed to higher spending on marketing, sales, and general and administrative expenses.
The company has struggled since its September IPO was the worst debut in 12 years for a US firm. Since then, shares have been weighed down by a scathing report from Hindenburg Research that said the company was cutting corners. Hindenburg shorted shares of SmileDirectClub and gave it a meager $2 price target.
Shares fell again in October when Hindenburg tweeted that SmileDirectClub's California stores were raided by the Dental Board of California in 2018. SmileDirectClub told Markets Insider that it filed a lawsuit against the California Dental Board and an investigator who "engaged in a pattern of illegal behavior" to harass customers and employees.
Still, Wall Street has been overwhelmingly bullish on the company. SmileDirectClub has a consensus price target of $20.44, and 10 "buy" ratings from analysts, according to Bloomberg data. So far, there are no "hold" or "sell" ratings on shares of the company, according to Bloomberg.
SmileDirectClub is down more than 60% year to date.
