SmileDirectClub is sitting on a huge opportunity
Investors are pessimistic about this name despite the company being best positioned to capitalize on this huge problem.
When I mention SmileDirectClub to investors, usually they'd think of a DTC Invisalign startup with bad reviews and fraud. That has been the picture after many customers have complained about the company and after Hindenberg Research published a short seller report on the company.
Like any disruptor, they will all have problems with the players that feel threatened by their presence. Taxi companies are fighting against Uber and Lyft as rideshare companies disrupt the taxi business model. Hotel companies are fighting Airbnb as Airbnb is essentially democratizing the hotel industry.
And for SmileDirectClub, orthodontists are fighting against the startup because the company is providing a generic version of the Invisalign teeth aligned that's direct to consumers. Before SmileDirectClub, orthodontists got to make a lot of money selling Invisalign to their patients. Then, SmileDirectClub came into the scene, and rather than do business with orthodontists, they removed them from the transaction and chose to pass on the savings to consumers.
While many will note that SmileDirectClub has numerous negative complaints, according to the Better Business Bureau (BBB), the average customer review rating for the company is 4-Stars and their rating by the BBB is an A+. Despite the many horror stories, SmileDirectClub still has a high reputation.
Before I tell you the big opportunity that SmileDirectClub has, it's important to note that SmileDirectClub is a big player in teledentistry. With their network of their own stores as well as their own locations within CVS and Walgreens, consumers can use their mold kits and send them to the SmileDirectClub laboratories and from there, SmileDirectClub creates an Invisalign set and ships it to them.
With teledentistry, SmileDirectClub is able to scale its reach towards many areas of the world. In the US, more than 60% of the counties in the country don’t have an orthodontist’s office. That number is higher worldwide. On the same note, the American Teledentistry Association believes that doctor-directed at-home clear aligner therapy can increase access to orthodontic care. Because SmileDirectClub provides doctor-directed at-home clear aligner therapy to customers, the company is well poised to capitalize on this problem.
And for the areas that are hard to reach, the SmileBus allows SmileDirectClub to reach those areas and provide people there with orthodontal care.
With fewer orthodontist offices being found in many more countries, SmileDirectClub is looking forward to expanding into those nations. For a long time, SmileDirectClub's international operations have been its fastest-growing operations. While SmileDirectClub is still in its early stages of international expansion, it has a whole lot more potential.
Also, SmileDirectClub recently expanded into providing teens with Invisalign. Teens are the fastest-growing segment for orthodontal products and services. With braces being unattractive and expensive, both parents and teens are looking forward to getting Invisalign from SmileDirectClub than from anywhere else.
One last thing. It might be minor but worth reading. While the dental products category has been relatively stable and stagnant for a long time, SmileDirectClub has been selling dental products on Walmart's shelves since the beginning of 2020. This move is going to provide a whole lot more competition for Colgate, Crest, and many more toothpaste and toothbrush companies.
In essence, SmileDirectClub is sitting on a huge opportunity. There is a massive shortage of orthodontist offices and services in many parts of the world. Since SmileDirectClub is providing a scalable and affordable product and service to those consumers, SmileDirectClub is able to capitalize on their unmet needs.
While some investors turn away from SmileDirectClub because its stock price is trading sideways, those who know the true value of this company are continuing to capitalize on the opportunity that's being presented to people.