Rebound potential

Smiledirectclub shares have shed about half their value since debuting last September, but Wall Street still sees potential in the maker of teeth-straightening dental aligners.

Founded in 2014, Smiledirect sells clear aligners online or through shops located in places like CVS Health stores. It’s not profitable, and won’t be until 2023, analysts expect. The company had to shut down its so-called Smileshops when the coronavirus pandemic hit, and it slashed its marketing about 90%. But things may not be as bad as they look for the company. Business didn’t fall as much as expected even as marketing all but stopped, a sign the company’s brand awareness has developed with patients, noted Alexander Nowak, an analyst with Craig-hallum Capital Group.

“They found out that when they pulled back the marketing, customers didn’t disappear,” he said.

The company has improved its financing terms in recent months. And because its aligners are cheaper than other options like braces and don’t require in-person visits, the company could be compelling “in the POST-COVID world,” Nowak said.