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

Smith Douglas Homes (NYSE:SDHC) issued 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 company had revenue of $273.03 million during the quarter, compared to the consensus estimate of $258.10 million. Smith Douglas Homes had a negative return on equity of 0.19% and a net margin of 0.64%.

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%

NYSE:SDHC traded down $0.14 during trading hours on Friday, hitting $13.91. 46,168 shares of the company’s stock 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 business’s fifty day simple moving average is $14.51 and its two-hundred day simple moving average is $14.63. The firm has a market cap of $706.35 million, a P/E ratio of 19.32 and a beta of 0.88.

Institutional Trading of Smith Douglas Homes

Several institutional investors and hedge funds have recently modified their holdings of the business. Geode Capital Management LLC grew its holdings in shares of Smith Douglas Homes by 8.8% during the second quarter. Geode Capital Management LLC now owns 101,896 shares of the company’s stock worth $1,980,000 after purchasing an additional 8,201 shares in the last quarter. First Trust Advisors LP increased its position in shares of Smith Douglas Homes by 5.8% in the second quarter. First Trust Advisors LP now owns 29,025 shares of the company’s stock worth $564,000 after purchasing an additional 1,583 shares during the last quarter. Marshall Wace LLP purchased a new stake in Smith Douglas Homes in the second quarter valued at approximately $644,000. Raymond James Financial Inc. purchased a new stake in Smith Douglas Homes in the second quarter valued at approximately $34,000. Finally, Wasatch Advisors LP lifted its position in Smith Douglas Homes by 4.4% during the second quarter. Wasatch Advisors LP now owns 1,279,357 shares of the company’s stock valued at $24,845,000 after purchasing an additional 53,358 shares during the last quarter.

Wall Street Analysts Forecast Growth

SDHC has been the topic of several analyst reports. Zacks Research upgraded Smith Douglas Homes from a “strong sell” rating to a “hold” rating in a research report on Friday, May 15th. Weiss Ratings restated a “sell (d+)” rating on shares of Smith Douglas Homes in a research report on Friday, July 17th. Finally, 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. One investment analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, Smith Douglas Homes presently 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.