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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)
Rating:57Neutral
Price Target:
$20.50
▼(-1.39% Downside)
Positive Factors
Earnings
SDHC's Q4 featured solid closings that were ahead of the guided range, indicating strong performance.
Financial Performance
SDHC's metrics, including balance sheet and ROE, are favorable compared to peers, showcasing strong financial health.
Negative Factors
Backlog
The backlog at year-end was down 24% year-over-year, highlighting a shrinking trend in the industry.
Cost Pressures
Smith Douglas Homes faces headwinds from cost inflation and pressure on net prices due to higher mortgage rates.
Order Trends
Orders missed estimates, reflecting potential challenges in sustaining order momentum.
Smith Douglas Homes Corp. Class A (SDHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$765.12M
Dividend YieldN/A
Average Volume (3M)66.85K
Price to Earnings (P/E)12.8
Beta (1Y)1.06
Revenue Growth22.89%
EPS Growth-18.01%
CountryUS
Employees445
SectorGeneral
Sector StrengthN/A
IndustryReal Estate - Development
Share Statistics
EPS (TTM)0.26
Shares Outstanding9,017,152
10 Day Avg. Volume66,892
30 Day Avg. Volume66,849
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.74
Enterprise Value/Revenue1.01
Enterprise Value/Gross Profit2.25
Enterprise Value/Ebitda5.12
Forecast
1Y Price Target
$17.75Price Target Upside-14.62% Downside
Rating ConsensusHold
Number of Analyst Covering4
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. makes money through the construction and sale of residential homes. The company's primary revenue stream comes from the sale of single-family homes to individual buyers. By strategically selecting land in growing markets and using cost-effective building practices, Smith Douglas Homes can offer competitively priced homes. The company may also generate revenue from partnerships with land developers and real estate agents, which help facilitate the sale of homes. Additionally, Smith Douglas Homes may offer financing options or collaborate with mortgage lenders to assist buyers in purchasing their homes, potentially earning fees or commissions from these services.
Smith Douglas Homes Corp. Class A Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Neutral
Smith Douglas Homes demonstrated strong operational performance and strategic growth through market expansion and improved construction efficiency. However, financial results were pressured by higher costs and lower net income, with ongoing challenges in consumer affordability and confidence.Q2-2025 Updates
Positive Updates
Strong Operational Performance
Smith Douglas Homes reported a pretax income of $17.2 million and earnings of $0.26 per diluted share. Home sales revenue was $224 million for the quarter, with home closings of 669, exceeding the guidance range. Gross margin was at the high end of guidance at 23.2%.
Increase in Active Communities and Controlled Lot Count
The company ended the second quarter with 92 active communities, a 23% increase over the second quarter of 2024, and improved controlled lot count by 57% compared to a year ago to almost 25,000 lots.
Expansion into New Markets
Smith Douglas Homes announced entry into the Dallas-Fort Worth and Gulf Coast of Alabama markets through greenfield start-ups, with expectations to start selling by year-end in DFW.
Improvement in Construction Efficiency
Average cycle time, excluding Houston, was 54 days, down from 60 days in the second quarter of 2024.
Favorable Debt Position
Net debt to net book capitalization ratio was 12.1% at the end of the quarter, with flexibility to utilize a $50 million share repurchase authorization.
Negative Updates
Decline in Net Income
Net income for the quarter was $16.4 million, down from $24.7 million in the prior year, and adjusted net income was $12.9 million compared to $19.4 million in the prior year.
Pressure on Gross Margin
Gross margin decreased year-over-year from 26.7% to 23.2%, impacted by higher average lot costs and rising incentives and promotional activity.
Affordability Challenges
Affordability constraints, declining consumer confidence, and a lack of urgency from buyers were noted as ongoing headwinds for the industry.
Higher SG&A Expenses
SG&A expenses increased by $2.9 million year-over-year, driven by increased payroll and expenses associated with the opening of new divisions.
Company Guidance
During Smith Douglas Homes' Second Quarter 2025 earnings call, several key metrics and guidance details were shared. The company reported a pretax income of $17.2 million and earnings of $0.26 per diluted share. Home sales revenue reached $224 million from 669 home closings, surpassing the previous guidance range, while the gross margin on home closings was at the high end of the guidance range at 23.2%. The average sales price for homes closed was $335,000, and the company ended the quarter with 92 active communities, a 23% increase from the previous year. Controlled lot count improved by 57% year-over-year to nearly 25,000 lots. The company announced plans to expand into the Dallas-Fort Worth and Gulf Coast of Alabama markets. Despite a challenging macroeconomic environment, Smith Douglas Homes maintained a net debt to net book capitalization ratio of 12.1% and outlined expectations for the third quarter, forecasting 725 to 775 home closings with an average sales price between $330,000 and $335,000, and a projected gross margin range of 20.5% to 21.5%.Smith Douglas Homes Corp. Class A Financial Statement Overview
Summary
Smith Douglas Homes Corp. Class A shows strong profit margins and improved leverage ratios, indicating operational efficiency and reduced financial risk. However, the substantial drop in revenue and cash flows from 2023 to 2024 is concerning and suggests potential challenges in the market or operational strategy.Income Statement
The company's revenue has declined significantly from 2023 to 2024, dropping by over 66%. Despite this, the gross profit margin remains robust at 100% in 2024, suggesting effective cost management. However, the net profit margin dropped from 16% to approximately 44%, indicating increased profitability relative to the reduced revenue. The EBIT and EBITDA margins improved, reflecting efficient operations. Overall, while the margins are strong, the sharp revenue decline is a concern.60
Neutral
Balance Sheet
The company's debt-to-equity ratio improved significantly from 0.37 in 2023 to 0.04 in 2024, indicating a much lower reliance on debt. The equity ratio also improved from 0.59 to 0.15, showing a stronger equity position. However, the absolute decrease in stockholders' equity is a notable concern. Overall, the balance sheet demonstrates improved leverage and equity stability, but the reduction in total equity warrants attention.70
Positive
Cash Flow
The operating cash flow has decreased from 2023 to 2024, but the company still maintains a positive free cash flow. The free cash flow to net income ratio improved, suggesting better cash conversion efficiency. However, the overall decrease in cash flows needs to be monitored. The cash flow management appears stable, with effective capital expenditure control, but reduced cash generation is a potential risk.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 565.32M | 975.46M | 764.63M | 755.35M | 518.86M |
| Gross Profit | 252.49M | 255.54M | 216.33M | 222.75M | 122.95M |
| EBITDA | 111.19M | 121.21M | 125.92M | 142.31M | 65.72M |
| Net Income | 14.50M | 16.07M | 123.18M | 140.44M | 62.53M |
Balance Sheet | |||||
| Total Assets | 570.22M | 475.90M | 352.69M | 223.37M | 201.19M |
| Cash, Cash Equivalents and Short-Term Investments | 16.78M | 22.36M | 19.78M | 29.60M | 25.34M |
| Total Debt | 74.09M | 12.07M | 78.40M | 18.39M | 74.41M |
| Total Liabilities | 155.39M | 74.17M | 143.79M | 58.86M | 105.67M |
| Stockholders Equity | 79.98M | 73.63M | 208.90M | 164.51M | 95.52M |
Cash Flow | |||||
| Free Cash Flow | -39.95M | 15.24M | 74.95M | 131.09M | 30.14M |
| Operating Cash Flow | -35.48M | 19.13M | 76.26M | 132.09M | 30.87M |
| Investing Cash Flow | -5.78M | -4.71M | -76.83M | 361.00K | 847.00K |
| Financing Cash Flow | 40.74M | -11.84M | -9.25M | -128.19M | -38.54M |
Smith Douglas Homes Corp. Class A Technical Analysis
Positive
20.79
Price Trends
19.94
Positive
19.41
Positive
22.06
Negative
Market Momentum
0.08
Negative
55.81
Neutral
72.52
Neutral
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 20.79 is above the 20-day moving average (MA) of 19.81, above the 50-day MA of 19.94, and below the 200-day MA of 22.06, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 55.81 is Neutral, neither overbought nor oversold. The STOCH value of 72.52 is Neutral, 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
Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.46B | 9.01 | 10.19% | ― | 2.35% | -17.21% | |
75 Outperform | $612.05M | 5.45 | 10.56% | ― | -19.68% | 44.82% | |
61 Neutral | ― | ― | 24.15% | -60.70% | |||
57 Neutral | $765.12M | 12.76 | 20.41% | ― | 22.89% | -18.01% | |
55 Neutral | $6.28B | 4.27 | -14.04% | 6.03% | 10.84% | 8.15% | |
43 Neutral | $256.17M | ― | -1.93% | ― | -4.84% | -412.72% | |
| ― | $14.47M | 0.42 | ― | ― | ― |
* General Sector Average
Performance Comparison
SDHC
Smith Douglas Homes Corp. Class A
20.79
-13.84
-39.97%
ARL
American Realty Investors
16.08
0.06
0.37%
FOR
Forestar Group
28.49
-1.43
-4.78%
XIN
Xinyuan Real Estate Co
1.95
-0.89
-31.34%
FPH
Five Point Holdings
5.89
2.62
80.12%
LSEA
Landsea Homes
11.31
-0.42
-3.58%
Smith Douglas Homes Corp. Class A Corporate Events
Shareholder Meetings
Smith Douglas Homes Corp. Holds Annual Stockholders Meeting
Positive
Jun 9, 2025
On June 5, 2025, Smith Douglas Homes Corp. held its Annual Meeting of Stockholders, where a significant majority of the company’s common stock was represented. During the meeting, all nominated directors were elected, and Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025, reflecting strong shareholder support for the company’s governance and financial oversight.
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.