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Smith Douglas Homes Corp. Class A (SDHC)
:SDHC
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Smith Douglas Homes Corp. Class A
(NYSE:SDHC)
64Neutral
Positive Factors
Earnings
SDHC's Q4 featured solid closings, exceeding both guidance and estimates, indicating strong performance.
Financial Performance
SDHC's metrics, such as balance sheet, cycle times, and ROE, all screen very favorably compared to peers.
Negative Factors
Backlog
The backlog at year-end was down 24% year-over-year, indicating a shrinking backlog trend in the industry.
Cost Inflation
Smith Douglas Homes faces headwinds from cost inflation while net price remains under pressure from higher mortgage rates.
Orders
Orders missed estimates, reflecting potential challenges in demand.
Smith Douglas Homes Corp. Class A (SDHC) vs. S&P 500 (SPY)
Market Cap
$869.09M
Dividend YieldN/A
Average Volume (3M)84.63K
Price to Earnings (P/E)11.3
Beta (1Y)1.72
Revenue Growth27.57%
EPS Growth-24.37%
CountryUS
Employees445
SectorGeneral
Sector StrengthN/A
IndustryReal Estate - Development
Share Statistics
EPS (TTM)1.81
Shares Outstanding8,991,378
10 Day Avg. Volume83,791
30 Day Avg. Volume84,625
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.55
Price to Cash Flow (P/CF)11.60
P/FCF Ratio11.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.00Price Target Upside4.48% Upside
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. generates revenue primarily through the sale of newly constructed single-family homes. The company's revenue model is based on the development and sale of these homes to individual buyers. Key revenue streams include the purchase price of the homes, any upgrades or customizations made by the buyers, and potential financing arrangements. The company may also benefit from strategic partnerships with suppliers and contractors, which can help in reducing costs and increasing profit margins. Additionally, Smith Douglas Homes' focus on efficient construction techniques and economies of scale contribute to its profitability.
Smith Douglas Homes Corp. Class A Financial Statement Overview
Summary
Smith Douglas Homes Corp. shows a mixed financial performance. The income statement reflects solid profit margins but declining revenue growth. The balance sheet highlights improved leverage metrics but reduced return on equity. Cash flows are strong, with positive free cash flows, indicating effective cash management. The company should focus on revenue growth and improving returns to strengthen its financial standing.Income Statement
Gross profit margin and net profit margin are strong, reflecting efficient cost management. However, there is a notable decline in revenue growth, with recent TTM figures showing a decrease compared to the previous year. The EBIT and EBITDA margins remain healthy, indicating robust operational performance, but the drop in revenue growth could pose future risks.72
Positive
Balance Sheet
The debt-to-equity ratio has significantly improved, indicating a stronger financial position with reduced leverage. The company's equity ratio is favorable, showing a solid base of equity in total assets. However, the decline in total revenue and net income has impacted return on equity negatively, suggesting a need for strategic improvements to enhance returns.65
Positive
Cash Flow
The company demonstrates strong cash flow management with a positive free cash flow growth rate, despite the recent dip in operating cash flow. The operating cash flow to net income ratio is robust, indicating effective conversion of income into cash. Although free cash flow to net income has decreased, it remains positive and signals healthy cash generation.78
Positive
| Breakdown | |||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|
| Income Statement | Total Revenue | ||
| 701.16M | 764.63M | 755.35M | 518.86M | Gross Profit |
| 240.22M | 216.33M | 222.75M | 122.95M | EBIT |
| 119.19M | 123.89M | 139.49M | 58.72M | EBITDA |
| 121.24M | 124.97M | 140.35M | 65.72M | Net Income Common Stockholders |
| 74.12M | 123.18M | 140.44M | 62.53M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||
| 29.60M | 19.78M | 29.60M | 25.34M | Total Assets |
| 223.37M | 352.69M | 223.37M | 201.19M | Total Debt |
| 18.39M | 78.40M | 18.39M | 74.41M | Net Debt |
| -11.21M | 58.63M | -11.21M | 49.07M | Total Liabilities |
| 58.86M | 143.79M | 58.86M | 105.67M | Stockholders Equity |
| 164.51M | 208.90M | 164.51M | 95.52M |
| Cash Flow | Free Cash Flow | ||
| 31.54M | 74.95M | 131.09M | 30.14M | Operating Cash Flow |
| 34.95M | 76.26M | 132.09M | 30.87M | Investing Cash Flow |
| -52.55M | -76.83M | 361.00K | 847.00K | Financing Cash Flow |
| 30.88M | -9.25M | -128.19M | -38.54M |
Smith Douglas Homes Corp. Class A Technical Analysis
Negative
20.10
Price Trends
22.50
Negative
26.57
Negative
29.15
Negative
Market Momentum
-0.75
Negative
41.01
Neutral
53.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDHC, the sentiment is Negative. The current price of 20.1 is below the 20-day moving average (MA) of 20.62, below the 50-day MA of 22.50, and below the 200-day MA of 29.15, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 41.01 is Neutral, neither overbought nor oversold. The STOCH value of 53.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | $40.77B | 9.15 | 19.35% | 1.08% | 2.12% | 1.63% | |
74 Outperform | $21.32B | 7.17 | 27.40% | 0.78% | 11.74% | 25.66% | |
69 Neutral | $10.86B | 7.63 | 20.38% | 0.84% | 5.86% | 12.20% | |
68 Neutral | $30.98B | 8.57 | 14.99% | 1.70% | 2.06% | -3.67% | |
66 Neutral | $4.18B | 7.15 | 15.60% | 1.71% | 5.54% | 11.25% | |
64 Neutral | $869.09M | 11.31 | 11.38% | ― | 27.57% | -24.37% | |
55 Neutral | $4.09B | -18.78 | -4.70% | 5.70% | 27.38% | -68.17% |
* General Sector Average
Performance Comparison
SDHC
Smith Douglas Homes Corp. Class A
20.48
-9.22
-31.04%
DHI
DR Horton
130.08
-32.98
-20.23%
KBH
KB Home
59.21
-10.70
-15.31%
LEN
Lennar
117.98
-45.11
-27.66%
PHM
PulteGroup
105.04
-14.72
-12.29%
TOL
Toll Brothers
108.81
-19.63
-15.28%
Smith Douglas Homes Corp. Class A Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -4.87% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Neutral
Smith Douglas Homes showed significant growth in revenue and home deliveries, benefiting from efficient cycle times and strategic land management. However, challenges such as declining margins due to increased lot costs and incentives, along with macroeconomic uncertainties like interest rates and affordability, present notable risks. Despite the positive growth metrics, these challenges balance the sentiment.Highlights
Record Pre-Tax Income and Home Deliveries
Smith Douglas Homes reported pre-tax income of $30 million for Q4 2024, contributing to a total of $117 million for the year. The company delivered 836 homes in Q4, setting a quarterly record, with 2,867 homes delivered for the full year.
Strong Revenue Growth
Q4 2024 revenue was $287 million, a 32% increase over the previous year. Full-year 2024 revenue was $975 million, marking a 28% increase from 2023.
Operational Efficiency and Land Strategy Success
The company achieved a 55-day cycle time and maintained a 'land-light' strategy with 96% of controlled lots via auction agreements, contributing to a 29% adjusted return on equity.
Expansion in Community Count
Smith Douglas Homes increased its active selling communities from 69 at the end of 2023 to 78 by the end of 2024.
Lowlights
Margin Pressure Due to Incentives and Lot Costs
Gross margins decreased from 28.3% in 2023 to 26.2% in 2024, primarily due to increased lot costs and the use of price incentives, which were 3.6% of revenue compared to 3.4% last year.
Interest Rate and Affordability Challenges
There were headwinds due to interest rates exceeding 7%, affecting affordability and contributing to slower sales in January 2025 before a pickup in February.
SG&A Expenses and Bonus Accruals
SG&A expenses were 14.9% of revenue in Q4, attributed to overachievement and additional bonus accruals, impacting the overall cost structure.
Macroeconomic Uncertainty Impacting Outlook
Uncertainties around tariffs, inflation, and interest rates pose risks to maintaining sales pace and margins.
Company Guidance
During the Smith Douglas Homes fourth quarter 2025 earnings call, the company provided several key metrics and insights into their performance and future outlook. For the fourth quarter of 2024, Smith Douglas Homes reported a pre-tax income of $30 million and delivered 836 homes, surpassing their guidance range and setting a quarterly record. The full year saw 2,867 homes delivered, generating $975 million in revenue with a gross margin of 26.2%. The company achieved an adjusted return on equity of 29% for 2024. Despite challenges from macroeconomic factors like interest rate hikes and affordability issues, the company remains optimistic about 2025, projecting home closings between 3,000 and 3,200 with an average sales price of $330,000 to $335,000. Gross margins are expected to range between 23.25% and 23.75% in the first quarter. Smith Douglas Homes ended the year with 19,522 controlled lots, maintaining a land-light strategy with 96% controlled via auction agreements. The company plans to continue expanding its presence in the Southeast, leveraging its operational efficiency and manufacturing approach to home building.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.