Smith Douglas Homes (NYSE:SDHC) Releases Quarterly Earnings Results, Misses Estimates By $0.08 EPS

Smith Douglas Homes (NYSE:SDHC) issued its quarterly earnings data on Thursday. The company reported $0.03 earnings per share (EPS) 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 business had revenue of $273.03 million during the quarter, compared to analyst estimates 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 Trading Down 1.0%

Shares of NYSE SDHC traded down $0.14 during mid-day trading on Friday, hitting $13.91. The company had a trading volume of 46,168 shares, compared to its average volume of 45,471. The company has a market capitalization of $706.35 million, a PE ratio of 19.32 and a beta of 0.88. The firm has a 50-day simple moving average of $14.51 and a two-hundred day simple moving average of $14.63. Smith Douglas Homes has a one year low of $10.72 and a one year high of $23.49.

Institutional Trading of Smith Douglas Homes

Several institutional investors and hedge funds have recently bought and sold shares of the stock. Wasatch Advisors LP increased its stake in shares of Smith Douglas Homes by 6.2% during the 4th quarter. Wasatch Advisors LP now owns 1,249,857 shares of the company’s stock worth $20,960,000 after purchasing an additional 72,525 shares during the last quarter. Marshall Wace LLP bought a new stake in shares of Smith Douglas Homes in the 2nd quarter valued at about $644,000. Wellington Management Group LLP lifted its stake in 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 valued at $19,738,000 after purchasing an additional 24,996 shares during the last quarter. Victory Capital Management Inc. acquired a new stake in Smith Douglas Homes in the 3rd quarter valued at about $346,000. Finally, VARCOV Co. bought a new position in Smith Douglas Homes during the fourth quarter worth about $200,000.

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on SDHC. Wall Street Zen raised shares of Smith Douglas Homes from a “sell” rating to a “hold” rating in a research note on Saturday, June 13th. Zacks Research upgraded shares of Smith Douglas Homes from a “strong sell” rating to a “hold” rating in a report on Friday, May 15th. Finally, Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Smith Douglas Homes in a research report on Friday, July 17th. One investment analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and a consensus 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.