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

by · The Markets Daily

Smith Douglas Homes (NYSE:SDHC – Get Free Report) released 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. The firm 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 Trading Down 1.0%

Shares of Smith Douglas Homes stock 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. The firm’s 50-day simple moving average is $14.51 and its 200 day simple moving average is $14.63. The company has a market cap of $706.35 million, a P/E ratio of 19.32 and a beta of 0.88. Smith Douglas Homes has a 12-month low of $10.72 and a 12-month high of $23.49.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in SDHC. Raymond James Financial Inc. bought a new stake in Smith Douglas Homes during the second quarter worth about $34,000. Tower Research Capital LLC TRC purchased a new position in shares of Smith Douglas Homes during the 2nd quarter valued at about $90,000. Price T Rowe Associates Inc. MD purchased a new position in shares of Smith Douglas Homes during the 4th quarter valued at about $182,000. VARCOV Co. bought a new stake in Smith Douglas Homes in the 4th quarter worth approximately $200,000. Finally, Victory Capital Management Inc. bought a new stake in Smith Douglas Homes in the 3rd quarter worth approximately $346,000.

Analyst Upgrades and Downgrades

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

Check Out Our Latest Stock Report on SDHC

Smith Douglas Homes Company Profile

(Get Free Report)

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.

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