Smith Douglas Homes (NYSE:SDHC) Posts Earnings Results, Misses Expectations By $0.08 EPS

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

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 traded down $0.14 on Friday, hitting $13.91. 46,168 shares of the company traded hands, compared to its average volume of 45,471. Smith Douglas Homes has a 52 week low of $10.72 and a 52 week high of $23.49. The stock has a 50 day simple moving average of $14.51 and a 200-day simple moving average of $14.63. The company has a market cap of $706.35 million, a PE ratio of 19.32 and a beta of 0.88.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the business. State Street Corp increased its position in Smith Douglas Homes by 2.7% during the fourth quarter. State Street Corp now owns 42,312 shares of the company’s stock valued at $710,000 after acquiring an additional 1,100 shares during the last quarter. Geode Capital Management LLC boosted its position in Smith Douglas Homes by 1.4% in the fourth quarter. Geode Capital Management LLC now owns 104,422 shares of the company’s stock worth $1,752,000 after purchasing an additional 1,406 shares during the last quarter. First Trust Advisors LP grew its stake in shares of Smith Douglas Homes by 5.8% during the 2nd quarter. First Trust Advisors LP now owns 29,025 shares of the company’s stock valued at $564,000 after purchasing an additional 1,583 shares during the period. Raymond James Financial Inc. bought a new stake in Smith Douglas Homes during the second quarter valued at approximately $34,000. Finally, Beck Mack & Oliver LLC increased its stake in shares of Smith Douglas Homes by 0.4% in the 4th quarter. Beck Mack & Oliver LLC now owns 816,447 shares of the company’s stock worth $13,692,000 after purchasing an additional 3,605 shares in the last quarter.

Analyst Upgrades and Downgrades

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

About Smith Douglas Homes

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.