By all rights, SmileDirectClub (NASDAQ:SDC) shareholders should be a happy bunch right now. After all, Covid-19 kept many people out of dental offices, creating the perfect opportunity for a company built around remote teledentistry. In addition, pandemic-weary consumers have spent 2 years of boosting spending on self-care. Improving their smile should have been a no-brainer. However, SDC stock has been in free fall all year.

It was trading near $19 after the company’s September, 2019 IPO. Somehow, shares are now worth less than $3. That’s a drop of 85% in just over two years.

If you hear opportunity knocking, you might want to have your ears checked. Despite the events and trends working in its favor, SmileDirectClub has failed to take advantage in spectacular fashion. SDC stock is down 76% so far in 2021 — and the year is not quite over yet.

Pandemic Trends Should Have Boosted SmileDirectClub’s Numbers

There have been dramatic changes in consumer behavior over the past 2 years as a result of the pandemic. During lockdown stages and during times of surging cases, people stayed at home. They turned to online shopping instead of venturing into stores.

At the same time, many spent more money on self-care and pampering. That includes increased spending on beauty treatments and other personal luxuries. 

When some companies began to let employees begin to return to the office earlier this year, spending on wellness and self-care surged again. People wanted to look good and to feel good. A survey of American consumers published in the summer found that 50% planned to spend more on self-care “activities, services, and treatments” over the next six months.

I look at that information and assume that SmileDirectClub should have been killing it. Being away from people for months at a time is the perfect opportunity to rework your smile. SmileDirectClub’s teledentistry operation means no having to repeatedly go to a dentist’s office for adjustments. The company’s teeth aligners fit the wellness and self-care trend perfectly, everything can be done remotely, and American consumers had stimulus checks to spend on big-ticket purchases.

Instead, SmileDirectClub has flailed. In March, the company reported full-year fiscal 2020 results. Annual revenue dropped from $706.5 million in 2019 to $607.4 million. By then, SDC stock was plummeting. The company reported third quarter 2021 earnings in November and the situation had not improved. Q3 revenue of $138 million was down 18.3% year-over-year. Diluted earnings-per-share of 23 cents decreased 109% YoY.

What Is Going Wrong Here and Can It Be Fixed?

In that Q3 earnings release, SmileDirectClub’s CEO tried to pin the blame on economic factors that cut into consumer spending. He wrote: “We are disappointed with our third-quarter results driven by the macroeconomic headwinds that are influencing the spending of our core demographic.”

I’m more inclined to go with InvestorPlace contributor David Moadel’s analysis. He puts much of the blame for SmileDirectClub’s dismal performance on out of control spending.

For example, in the previous quarter, the company’s marketing expenses surged 178% YoY. That free-wheeling spending has also saddled the company with debt. The company has been trying to address spending issues, but it will take time.

Bottom Line on SDC Stock

With a lowly “F” rating in my Portfolio Grader and a year spent skidding lower by the day, SDC stock is not a great candidate if you’re looking to build a growth-focused portfolio. It’s not like consumers stopped spending and the demand for SmileDirectClub’s aligners are going to suddenly pick up. They’ve been in a buying mood all through the pandemic.

In fact, one of the company’s key competitors has been booking record sales — despite selling direct to dentist offices, which should have been a disadvantage with lockdowns and social distancing measures.  

If SmileDirectClub can’t deliver in these circumstances, I can’t see a scenario where the situation improves any time soon.

Not all analysts feel quite as strongly as I do, but this stock is losing support fast. Among the investment analysts polled by CNN Business, the consensus rating for SDC is “hold.” But it’s a very narrow consensus, with only one “buy” recommendation among 12 analysts. And that ratio has been steadily shrinking all year. In June, there were six “buy” recommendations, dropping to three by August, and now a single SmileDirectClub bull.

If you’re an optimist and choose to see the implosion of SDC stock as an opportunity, then its current price — just a few cents off its all-time low of $2.52 — might be tempting. As for me, I’m staying far away, and I’d suggest you do the same.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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