Smith Douglas Homes (NYSE:SDHC) Issues Earnings Results

Smith Douglas Homes (NYSE:SDHC) announced its quarterly earnings results on Thursday. The company reported $0.03 earnings per share for the quarter, missing the consensus estimate of $0.11 by ($0.08), FiscalAI reports. Smith Douglas Homes had a net margin of 0.64% and a negative return on equity of 0.19%. The company had revenue of $273.03 million for the quarter, compared to the consensus estimate of $258.10 million.

Here are the key takeaways from Smith Douglas Homes’ conference call:

• Net orders rose 32% year over year to 970, while closings increased 25% to 839 and revenue grew 22% to $273 million. The company ended the quarter with 1,000 homes in backlog, up 17% year over year.
• Profitability deteriorated as incentives and pricing adjustments increased; adjusted gross margin was approximately 19% and adjusted EBITDA fell to $13.4 million from $19.8 million a year earlier. The company recorded $3.1 million of inventory impairments and $4.5 million of lot abandonment charges.
• Management expects third-quarter closings of 825–900 homes, average selling prices of $315,000–$320,000, and gross margin of only 16%–16.5%. The outlook reflects continued use of incentives and price reductions, and the company is not providing full-year guidance because demand remains variable.
• Smith Douglas continued expanding its platform, reaching 110 active communities, up 20% year over year, while maintaining a land-light strategy with 21,655 option lots and only 3% of controlled unstarted lots owned on balance sheet. The company also repurchased $4.4 million of stock during the quarter, bringing year-to-date repurchases to approximately $10.1 million.

Smith Douglas Homes Stock Down 1.0%

Shares of NYSE SDHC opened at $13.91 on Friday. The stock’s 50-day simple moving average is $14.51 and its two-hundred day simple moving average is $14.63. Smith Douglas Homes has a twelve month low of $10.72 and a twelve month high of $23.49. The firm has a market capitalization of $706.35 million, a P/E ratio of 19.32 and a beta of 0.88.

Institutional Trading of Smith Douglas Homes

A number of large investors have recently modified their holdings of SDHC. Wasatch Advisors LP raised its position in Smith Douglas Homes by 6.2% during the fourth quarter. Wasatch Advisors LP now owns 1,249,857 shares of the company’s stock valued at $20,960,000 after purchasing an additional 72,525 shares in the last quarter. Marshall Wace LLP bought a new stake in Smith Douglas Homes during the second quarter worth about $644,000. Wellington Management Group LLP boosted its holdings in shares of Smith Douglas Homes by 2.2% in the 4th quarter. Wellington Management Group LLP now owns 1,176,973 shares of the company’s stock worth $19,738,000 after purchasing an additional 24,996 shares in the last quarter. Victory Capital Management Inc. purchased a new position in shares of Smith Douglas Homes in the 3rd quarter worth about $346,000. Finally, VARCOV Co. bought a new position in shares of Smith Douglas Homes during the 4th quarter valued at about $200,000.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently commented on the stock. Wall Street Zen upgraded shares of Smith Douglas Homes from a “sell” rating to a “hold” rating in a research report on Saturday, June 13th. Zacks Research raised shares of Smith Douglas Homes from a “strong sell” rating to a “hold” rating in a report on Friday, May 15th. Finally, Weiss Ratings reiterated a “sell (d+)” rating on shares of Smith Douglas Homes in a research note on Friday, July 17th. One analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, Smith Douglas Homes currently has a consensus rating of “Reduce” and an average target price of $13.90.

Smith Douglas Homes Company Profile

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.