Nashville-based dental aligner designer SmileDirectClub (NASDAQ:SDC) has straightened plenty of smiles. However, the price performance of SDC stock has left the long-term investors frowning.

It’s been disappointing for the shareholders, especially since consumer behavior should favor SmileDirectClub. In fact, one survey from the summer of 2021 found that 50% of U.S. consumers planned to spend more money on self-care over the next six months.

That should have provided a major tailwind for SmileDirectClub, but 2021 turned out to be a dreadful year for SDC stockholders. As we’ll see, the trend isn’t the shareholders’ friend and SmileDirectClub’s financial stats aren’t helping the bull thesis at all.

Still, there may be hope on the horizon. As the company ventures into artificial intelligence (AI) powered dental tech, SmileDirectClub’s future could be a lot healthier.

A Closer Look at SDC Stock

As we embark on a new year in the markets, it’s definitely time for a checkup on SDC stock.

Now, I’m not a dentist, but I’m definitely detecting some decay here. Indeed, the SmileDirectClub share price declined by a jaw-dropping 56% year-to-date in 2021.

The situation didn’t look so dire in early 2021 as SDC stock seemingly got a Reddit-fueled pump to $16. After that, though, the stock went from Reddit to forget it, shedding half of its value before the summer even started.

If you can believe it, SmileDirectClub shares closed out the year at the painfully low price of $2.35. Even amid a year-long rotation out of smaller businesses, this drawdown was particularly brutal.

When a stock declines continuously, it’s difficult or impossible to identify meaningful support levels. The best we can do — from a technical standpoint — is to hope that SDC stock is actually a bargain rather than a proverbial falling knife.

A Small Ramp

Turning to the financials, it’s not difficult to find negative news concerning SmileDirectClub.

During the third quarter of 2021, the company reported an 18.3% year-over-year decrease in revenues. SmileDirectClub also posted a net earnings loss of $89 million, adjusted EBITDA of -$54 million, and diluted earnings per share of -23 cents for 2021’s third quarter.

In light of those disappointing results, analysts at William Blair issued a research note titled, “Another Large Sales and EBITDA Miss Makes Timing of Profitability Very Unclear.”

SmileDirectClub doesn’t seem particularly optimistic, either. Discouragingly, the company reduced its full-year 2021 revenue guidance from a range of $750 million to $800 million, to $630 million to $650 million.

Still, we can cherry-pick some positives among the sea of negatives. Apparently, SmileDirectClub foresees a “small ramp in Germany and Spain” as the company continues to onboard more locations and increase marketing investments worldwide.

Straighter Smiles Through AI

Don’t be surprised if you see more television advertising for SmileDirectClub in the near future.

Supposedly, the company’s marketing strategy will be “more focused on higher funnel leads through platforms such as TV.” Whether this actually translates to a better bottom line for SmileDirectClub remains to be seen.

There is another encouraging development, though. Reportedly, SmileDirectClub is expanding its business beyond clear plastic aligner production.

Not long ago, the company revealed a treatment planning software called SmileOS. This product, according to SmileDirectClub, can help some doctors (dentists, presumably) to “treat more patients, more accurately predict tooth movements, and better visualize their patients’ treatment.”

There’s a machine learning angle here, as well. According to the press release, SmileOS is powered by AI using data from over 1.5 million clear aligner treatment plans. With the help of novel algorithms, doctors will apparently be able to “optimize precise tooth movements to achieve a straighter smile.”

It’s an intriguing product concept and could be a game changer in dental technology. Only time will tell whether it’s actually profitable for SmileDirectClub, though.

The Bottom Line on SDC Stock

I’ve got to hand it to SmileDirectClub. The company isn’t giving up, even if some of the shareholders did.

Getting into the dental-tech software business is risky for SmileDirectClub. But then, staying on its current course probably isn’t a viable option for the company either.

So, at least we identified a few positive points for the shareholders to hang their hats on. It’s difficult to actually recommend SDC stock at this point, but hopefully, swinging to a profit in 2022 won’t be like pulling teeth.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks. 

Read More: Penny Stocks — How to Profit Without Getting Scammed 

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.