Smith Douglas Homes (NYSE:SDHC) Shares Gap Up - Should You Buy?

Key Points

• Smith Douglas Homes shares gapped higher, opening at $10.39 versus a prior close of $9.78 and last trading at $10.45, though volume was very light at 226 shares.
• Analyst sentiment remains cautious: the consensus rating is “Hold” with an $11.38 target price, while Wells Fargo and RBC both set $10 targets; coverage includes one Buy, seven Holds, and one Sell.
• The company missed quarterly earnings expectations, reporting $0.03 per share versus the $0.11 consensus, despite revenue of $273.03 million exceeding estimates. Its net margin was just 0.64%, and analysts expect full-year earnings of $0.25 per share.

Shares of Smith Douglas Homes Corp. (NYSE:SDHC - Get Free Report) gapped up prior to trading on Friday. The stock had previously closed at $9.78, but opened at $10.39. Smith Douglas Homes shares last traded at $10.45, with a volume of 226 shares traded.

Analysts Set New Price Targets

Several brokerages recently weighed in on SDHC. Weiss Ratings reaffirmed a "sell (d+)" rating on shares of Smith Douglas Homes in a research note on Thursday. Wells Fargo & Company set a $10.00 target price on shares of Smith Douglas Homes in a research note on Friday. Finally, Royal Bank Of Canada lowered their target price on Smith Douglas Homes from $15.00 to $10.00 and set a "sector perform" rating for the company in a research report on Thursday. One analyst has rated the stock with a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus target price of $11.38.

Smith Douglas Homes Stock Performance

The business has a 50-day moving average of $11.37 and a 200-day moving average of $12.97. The stock has a market capitalization of $531.66 million, a price-to-earnings ratio of 14.53 and a beta of 0.90.

Smith Douglas Homes (NYSE:SDHC - Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported $0.03 earnings per share for the quarter, missing analysts' consensus estimates of $0.11 by ($0.08). The firm had revenue of $273.03 million during the quarter, compared to analyst estimates of $258.10 million. Smith Douglas Homes had a net margin of 0.64% and a negative return on equity of 0.19%. Equities analysts predict that Smith Douglas Homes Corp. will post 0.25 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the company. Hsbc Holdings PLC bought a new position in shares of Smith Douglas Homes in the first quarter valued at approximately $168,000. Ruane Cunniff & Goldfarb L.P. boosted its stake in shares of Smith Douglas Homes by 18.7% during the 1st quarter. Ruane Cunniff & Goldfarb L.P. now owns 14,490 shares of the company's stock worth $185,000 after acquiring an additional 2,281 shares in the last quarter. Dimensional Fund Advisors LP acquired a new stake in shares of Smith Douglas Homes in the first quarter valued at about $324,000. Squarepoint Ops LLC raised its position in shares of Smith Douglas Homes by 37.1% during the second quarter. Squarepoint Ops LLC now owns 31,818 shares of the company's stock valued at $494,000 after buying an additional 8,606 shares during the last quarter. Finally, Conifer Management L.L.C. bought a new position in shares of Smith Douglas Homes during the 2nd quarter worth about $22,274,259.

About Smith Douglas Homes

Smith Douglas Homes Corp. is a residential homebuilder that designs, constructs and sells single-family homes in selected markets across the southeastern and southern United States. The company focuses primarily on building attainable homes for first-time and move-up buyers.

Its homes are offered in a range of floor plans and configurations, with options intended to address varying household sizes, lifestyles and budgets. In addition to constructing homes, Smith Douglas Homes typically acquires and develops residential lots, manages the homebuilding process and provides customer service to homebuyers.

Founded in 2008, the company has expanded its operations across several markets, including communities in Georgia, Alabama, Tennessee, North Carolina and Texas.

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