SmileDirectClub Inc. [NASDAQ: SDC] stock went on an upward path that rose over 0.16% on Wednesday, amounting to a one-week price decrease of less than -12.31%. The company report on February 5, 2021 that SmileDirectClub, Inc. Prices Upsized $650,000,000 Million Convertible Senior Notes Offering.
SmileDirectClub, Inc. (“SmileDirectClub”) (NASDAQ: SDC) announced the pricing of its offering of $650,000,000 aggregate principal amount of 0.00% convertible senior notes due 2026 (the “notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offering size was increased from the previously announced offering size of $350,000,000 aggregate principal amount of notes. The issuance and sale of the notes are scheduled to settle on February 9, 2021, subject to customary closing conditions. SmileDirectClub also granted the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date notes are first issued, up to an additional $97,500,000 principal amount of notes.
The notes will be senior, unsecured obligations of SmileDirectClub, will not bear regular interest, and the principal amount of the notes will not accrete. The notes will mature on February 1, 2026, unless earlier repurchased, redeemed or converted. Before August 1, 2025, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after August 1, 2025, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. SmileDirectClub will settle conversions by paying or delivering, as applicable, cash, shares of its Class A common stock or a combination of cash and shares of its Class A common stock, at SmileDirectClub’s election. The notes will be redeemable, in whole or in part, for cash at SmileDirectClub’s option at any time, and from time to time, on or after February 6, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of SmileDirectClub’s Class A common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date. The initial conversion rate is 55.3710 shares of Class A common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $18.06 per share of Class A common stock. The initial conversion price represents a premium of approximately 40.0% over the last reported sale of $12.90 per share of SmileDirectClub’s Class A common stock on February 4, 2021. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
Over the last 12 months, SDC stock dropped by -15.14%. The one-year SmileDirectClub Inc. stock forecast points to a potential downside of -1.2. The average equity rating for SDC stock is currently 1.90, trading closer to a bullish pattern in the stock market.
The market cap for the stock reached $5.02 billion, with 111.70 million shares outstanding and 84.56 million shares in the current float. Compared to the average trading volume of 6.90M shares, SDC stock reached a trading volume of 6644375 in the most recent trading day, which is why market watchdogs consider the stock to be active.
Guru’s Opinion on SmileDirectClub Inc. [SDC]:
Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for SDC shares is $12.46 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on SDC stock is a recommendation set at 1.90. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.
Wolfe Research have made an estimate for SmileDirectClub Inc. shares, keeping their opinion on the stock as Outperform, with their previous recommendation back on December 08, 2020. While these analysts kept the previous recommendation, Stifel raised their target price from $11 to $14. The new note on the price target was released on September 17, 2020, representing the official price target for SmileDirectClub Inc. stock. On July 13, 2020, analysts increased their price target for SDC shares from 9 to 11.
The Average True Range (ATR) for SmileDirectClub Inc. is set at 1.06, with the Price to Sales ratio for SDC stock in the period of the last 12 months amounting to 7.50. The Price to Book ratio for the last quarter was 4.49, with the Price to Cash per share for the same quarter was set at 0.94.
SDC Stock Performance Analysis:
SmileDirectClub Inc. [SDC] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -12.31. With this latest performance, SDC shares gained by 3.79% in over the last four-week period, additionally plugging by 40.89% over the last 6 months – not to mention a drop of -15.14% in the past year of trading.
Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for SDC stock in for the last two-week period is set at 49.42, with the RSI for the last a single of trading hit 46.97, and the three-weeks RSI is set at 50.67 for SmileDirectClub Inc. [SDC]. The present Moving Average for the last 50 days of trading for this stock 12.29, while it was recorded at 12.64 for the last single week of trading, and 9.98 for the last 200 days.
Insight into SmileDirectClub Inc. Fundamentals:
Operating Margin for any stock indicates how profitable investing would be, and SmileDirectClub Inc. [SDC] shares currently have an operating margin of -65.33 and a Gross Margin at +74.08. SmileDirectClub Inc.’s Net Margin is presently recorded at -15.26.
Return on Total Capital for SDC is now -87.40, given the latest momentum, and Return on Invested Capital for the company is -24.28. Return on Equity for this stock declined to -36.28, with Return on Assets sitting at -15.90. When it comes to the capital structure of this company, SmileDirectClub Inc. [SDC] has a Total Debt to Total Equity ratio set at 62.60. Additionally, SDC Total Debt to Total Capital is recorded at 38.50, with Total Debt to Total Assets ending up at 23.55. Long-Term Debt to Equity for the company is recorded at 51.98, with the Long-Term Debt to Total Capital now at 31.97.
Receivables Turnover for the company is 4.25 with a Total Asset Turnover recorded at a value of 1.04.SmileDirectClub Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 2.90 and a Current Ratio set at 3.00.
SDC Stock EPS
With the latest financial reports released by the company, SmileDirectClub Inc. posted -0.25/share EPS, while the average EPS was predicted by analysts to be reported at -0.09/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -177.80%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for SDC.
SmileDirectClub Inc. [SDC] Insider Position Details
There are presently around $872 million, or 80.60% of SDC stock, in the hands of institutional investors. The top three institutional holders of SDC stocks are: CLAYTON, DUBILIER & RICE, LLC with ownership of 11,903,167, which is approximately -55.755% of the company’s market cap and around 2.50% of the total institutional ownership; VANGUARD GROUP INC, holding 7,012,255 shares of the stock with an approximate value of $88.42 million in SDC stocks shares; and FMR LLC, currently with $84.86 million in SDC stock with ownership of nearly -15.112% of the company’s market capitalization.
Positions in SmileDirectClub Inc. stocks held by institutional investors increased at the end of March and at the time of the March reporting period, where 97 institutional holders increased their position in SmileDirectClub Inc. [NASDAQ:SDC] by around 23,806,524 shares. Additionally, 76 investors decreased positions by around 21,431,734 shares, while 23 investors held positions by with 23,946,661 shares. The mentioned changes placed institutional holdings at 69,184,919 shares, according to the latest SEC report filing. SDC stock had 55 new institutional investments in for a total of 15,778,088 shares, while 29 institutional investors sold positions of 2,299,383 shares during the same period.