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Smith Douglas Homes Corp. Class A (SDHC)
NYSE:SDHC
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Smith Douglas Homes Corp. Class A
(NYSE:SDHC)
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Select Model
Rating:56Neutral
Price Target:
$19.50
▲(0.10% Upside)
The overall stock score of 56 reflects significant financial challenges, including declining revenue and cash flow issues, which weigh heavily on the company's outlook. While technical indicators show some short-term bullish momentum, valuation metrics and earnings call insights reveal underlying profitability concerns. Strategic expansions offer potential growth, but increased cost pressures and declining margins are notable risks.
Positive Factors
Market Expansion
Expanding into new markets like Greenville, Dallas, and the Gulf Coast can drive long-term growth by tapping into new customer bases and increasing market share.
Operational Efficiency
Consistent cycle times indicate strong operational efficiency, which can enhance profitability by reducing costs and improving project turnaround.
Net Orders Growth
A 15% increase in net orders suggests strong demand and potential revenue growth, supporting long-term business sustainability and market presence.
Negative Factors
Declining Revenue
A decline in revenue indicates potential challenges in market demand or pricing power, which could impact long-term financial health and growth prospects.
Gross Margin Decline
A decrease in gross margins suggests increased cost pressures and reduced pricing power, which can affect profitability and competitive positioning over time.
Increased Debt Levels
Higher debt levels can strain cash flow and limit financial flexibility, potentially impacting the company's ability to invest in growth and weather economic downturns.
Smith Douglas Homes Corp. Class A (SDHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$992.54M
Dividend YieldN/A
Average Volume (3M)80.35K
Price to Earnings (P/E)15.4
Beta (1Y)1.15
Revenue Growth10.26%
EPS Growth-73.20%
CountryUS
Employees445
SectorReal Estate
Sector Strength53
IndustryReal Estate - Development
Share Statistics
EPS (TTM)0.24
Shares Outstanding9,017,638
10 Day Avg. Volume84,466
30 Day Avg. Volume80,347
Financial Highlights & Ratios
PEG Ratio-0.58
Price to Book (P/B)3.08
Price to Sales (P/S)0.23
P/FCF Ratio14.88
Enterprise Value/Market Cap0.55
Enterprise Value/Revenue0.55
Enterprise Value/Gross Profit2.33
Enterprise Value/Ebitda6.10
Forecast
1Y Price Target
$16.75Price Target Upside-14.01% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)0.91
Revenue Forecast (FY)$961.83M
Smith Douglas Homes Corp. Class A Business Overview & Revenue Model
Company DescriptionSmith Douglas Homes Corp. engages in the design, construction, and sale of single-family homes in the southeastern United States. The company operates in metropolitan Atlanta, Birmingham, Charlotte, Huntsville, Nashville, Raleigh-Durham, and Houston. It also provides closing, escrow, and title insurance services. The company was founded in 2008 and is headquartered in Woodstock, Georgia.
How the Company Makes MoneySmith Douglas Homes Corp. generates revenue primarily through the sale of residential properties, which includes the construction and sale of new homes. The company profits by acquiring land, developing it into residential communities, and building homes that meet the demands of local markets. Key revenue streams include home sales, which are driven by market demand and pricing strategies, as well as potential ancillary services such as mortgage origination and home warranty offerings. SDHC may also benefit from partnerships with local contractors and suppliers, which can enhance its operational efficiency and cost management, ultimately contributing to its profitability.
Smith Douglas Homes Corp. Class A Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 24, 2026
Earnings Call Sentiment Neutral
Smith Douglas Homes demonstrated resilience through strategic market expansions and operational efficiency. However, the quarter faced challenges such as decreased home closings and revenue, declining gross margins, and increased cost pressures, affecting overall profitability.Q3-2025 Updates
Positive Updates
Pre-tax Income and Earnings
Smith Douglas Homes reported pre-tax income of $17.2 million and earnings of $0.24 per share for the third quarter of 2025.
Net Orders Increase
Net orders for the quarter increased by 15% year-over-year to 690 homes, indicating improved demand compared to the previous year.
New Market Expansion
The company began construction in new markets, including Greenville, Dallas, and the Gulf Coast, which are expected to contribute to future growth.
Controlled Lot Expansion
The company has nearly tripled its controlled lot count since going public, indicating a strong foundation for future growth.
Cycle Times and Efficiency
Cycle times remained consistent at 54 days, excluding Houston, showcasing operational efficiency.
Negative Updates
Decrease in Home Closings and Revenue
Home closings decreased by 3% from the previous year, with revenue dropping by 6% to $262 million.
Gross Margin Decline
Gross margins fell from 26.5% to 21% year-over-year, largely due to higher average lot costs and increased incentives and discounts.
Increased Cost Pressures
Increased payroll expenses and higher closing cost incentives led to a rise in SG&A, which was up approximately $2 million year-over-year.
Net Income Decline
Net income for the quarter decreased to $16.2 million from $37.8 million in the prior year.
Impact of Forward Commitments
Costs on forward commitments were $3.9 million compared to $185,000 a year ago, impacting overall profitability.
Company Guidance
During the Smith Douglas Homes Third Quarter 2025 Earnings Call, the company provided detailed guidance and performance metrics for the quarter. Smith Douglas Homes reported pretax income of $17.2 million and earnings of $0.24 per share, with home sales revenue reaching $262 million. The company achieved home closings totaling 788, with an average selling price of $333,000, and gross margins on homes closed averaged 21%. Net orders increased by 15% year-over-year to 690 homes, demonstrating a sales pace of 2.4 homes per community per month. The backlog at the end of the quarter consisted of 760 homes with an average sales price of approximately $340,000. The company is focusing on maintaining its "pace over price" strategy, utilizing financing incentives to drive sales. For the fourth quarter, Smith Douglas Homes expects to close between 725 and 775 homes, with an average sales price between $330,000 and $335,000, and gross margins projected to be in the range of 18.5% to 19.5%. The call also highlighted the company's strategic market expansions and disciplined financial management, including maintaining a debt-to-book capitalization of 11.2% and a net debt to book capitalization of 8.4%.Smith Douglas Homes Corp. Class A Financial Statement Overview
Summary
Smith Douglas Homes Corp. faces significant challenges with declining revenue and cash flow issues in the TTM period. While profitability margins remain strong, the increased debt levels and reduced return on equity suggest potential financial strain. The company needs to address its cash flow and revenue growth to stabilize its financial position.Income Statement
The income statement shows a significant decline in revenue growth rate of -71.65% in the TTM period, indicating a major downturn. However, the company maintains a strong gross profit margin of 81.31% and a net profit margin of 19.29% in the TTM, reflecting efficient cost management. Historical data shows fluctuating margins with a peak in 2022, but recent trends suggest declining profitability.Balance Sheet
The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.65 in the TTM, which is higher than previous years, indicating increased reliance on debt. The return on equity has decreased to 19.40% in the TTM from a high of 85.37% in 2022, suggesting reduced profitability for shareholders. The equity ratio remains stable, indicating a balanced asset structure.Cash Flow
The cash flow statement reveals negative operating cash flow and free cash flow in the TTM, indicating liquidity challenges. The free cash flow to net income ratio is positive at 1.13, but the negative operating cash flow coverage ratio of -1.68 highlights potential cash management issues. Historical data shows a decline in free cash flow growth, raising concerns about future cash generation.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 998.17M | 975.46M | 764.63M | 755.35M | 518.86M |
| Gross Profit | 233.77M | 255.54M | 216.33M | 222.75M | 122.95M |
| EBITDA | 89.40M | 121.21M | 125.92M | 142.31M | 65.72M |
| Net Income | 11.28M | 16.07M | 123.18M | 140.44M | 62.53M |
Balance Sheet | |||||
| Total Assets | 571.56M | 475.90M | 352.69M | 223.37M | 201.19M |
| Cash, Cash Equivalents and Short-Term Investments | 14.78M | 22.36M | 19.78M | 29.60M | 25.34M |
| Total Debt | 55.79M | 12.07M | 78.98M | 18.39M | 74.41M |
| Total Liabilities | 145.12M | 74.17M | 143.79M | 58.86M | 105.67M |
| Stockholders Equity | 82.18M | 73.63M | 208.90M | 164.51M | 95.52M |
Cash Flow | |||||
| Free Cash Flow | -40.80M | 15.24M | 74.95M | 131.09M | 30.14M |
| Operating Cash Flow | -35.62M | 19.13M | 76.26M | 132.09M | 30.87M |
| Investing Cash Flow | -6.50M | -4.71M | -76.83M | 361.00K | 847.00K |
| Financing Cash Flow | 33.17M | -11.84M | -9.25M | -128.19M | -38.54M |
Smith Douglas Homes Corp. Class A Technical Analysis
Positive
19.48
Price Trends
18.58
Positive
18.35
Positive
18.83
Positive
Market Momentum
-0.24
Negative
56.49
Neutral
83.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDHC, the sentiment is Positive. The current price of 19.48 is above the 20-day moving average (MA) of 18.69, above the 50-day MA of 18.58, and above the 200-day MA of 18.83, indicating a bullish trend. The MACD of -0.24 indicates Negative momentum. The RSI at 56.49 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDHC.
Smith Douglas Homes Corp. Class A Risk Analysis
Smith Douglas Homes Corp. Class A disclosed 83 risk factors in its most recent earnings report. Smith Douglas Homes Corp. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Smith Douglas Homes Corp. Class A Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.39B | 8.48 | 9.99% | ― | 10.13% | -18.11% | |
71 Outperform | $642.30M | 4.49 | 12.52% | ― | -1.52% | 81.35% | |
67 Neutral | $113.05M | 11.10 | 8.04% | ― | -27.32% | -15.12% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
56 Neutral | $992.54M | 15.45 | 14.98% | ― | 10.26% | -73.20% | |
53 Neutral | $255.85M | 45.04 | 0.95% | ― | -0.58% | ― | |
48 Neutral | $244.51M | -0.77 | ― | ― | -75.38% | ― |
* Real Estate Sector Average
SDHC
Smith Douglas Homes Corp. Class A
20.83
-2.64
-11.25%
ARL
American Realty Investors
15.92
1.70
11.95%
AXR
Amrep
21.66
-8.13
-27.29%
FOR
Forestar Group
27.36
1.62
6.29%
FPH
Five Point Holdings
5.72
2.02
54.59%
AMBR
Amber International Holding
2.60
-5.49
-67.86%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.