Smith Douglas Homes (NYSE:SDHC) Shares Down 8.3% - What's Next?

Key Points

• Smith Douglas Homes' shares dropped by 8.3% to close at $16.86, with trading volume down 63% from the average.
• Analysts have adjusted their price targets for the stock, with estimates ranging from $16.00 to $20.00, reflecting a cautious outlook.
• The company has approved a $50 million stock buyback plan, indicating management's belief that the shares are undervalued.

Shares of Smith Douglas Homes Corp. (NYSE:SDHC - Get Free Report) dropped 8.3% on Monday . The stock traded as low as $17.11 and last traded at $16.86. Approximately 28,150 shares changed hands during trading, a decline of 63% from the average daily volume of 76,526 shares. The stock had previously closed at $18.39.

Wall Street Analysts Forecast Growth

Several analysts have issued reports on SDHC shares. JPMorgan Chase & Co. dropped their price objective on Smith Douglas Homes from $24.00 to $18.50 and set a "neutral" rating on the stock in a research note on Wednesday, May 21st. Wells Fargo & Company lowered their target price on Smith Douglas Homes from $21.00 to $20.00 and set an "equal weight" rating on the stock in a research note on Monday, April 14th. Wall Street Zen lowered Smith Douglas Homes from a "hold" rating to a "sell" rating in a research note on Saturday. Royal Bank Of Canada set a $16.00 price objective on Smith Douglas Homes and gave the stock a "sector perform" rating in a research note on Tuesday, May 20th. Finally, Wedbush restated a "neutral" rating and set a $18.00 price objective on shares of Smith Douglas Homes in a research note on Wednesday, May 14th. Two investment analysts have rated the stock with a sell rating and four have issued a hold rating to the company's stock. According to MarketBeat, the company has an average rating of "Hold" and a consensus price target of $18.90.

Smith Douglas Homes Stock Performance

The business has a 50 day moving average price of $19.58 and a two-hundred day moving average price of $20.15. The stock has a market cap of $891.49 million, a PE ratio of 10.90, a P/E/G ratio of 10.07 and a beta of 1.05.

Smith Douglas Homes (NYSE:SDHC - Get Free Report) last posted its quarterly earnings data on Wednesday, August 6th. The company reported ($0.13) EPS for the quarter, missing the consensus estimate of $0.25 by ($0.38). Smith Douglas Homes had a net margin of 1.43% and a return on equity of 1.74%. The firm had revenue of $223.92 million during the quarter, compared to analysts' expectations of $216.01 million. As a group, research analysts anticipate that Smith Douglas Homes Corp. will post 1.73 earnings per share for the current year.

Smith Douglas Homes declared that its Board of Directors has approved a stock repurchase plan on Wednesday, May 28th that permits the company to buyback $50.00 million in outstanding shares. This buyback authorization permits the company to repurchase up to 5.1% of its stock through open market purchases. Stock buyback plans are generally a sign that the company's management believes its shares are undervalued.

Insider Buying and Selling

In other Smith Douglas Homes news, Director Jeffrey T. Jackson bought 6,000 shares of the stock in a transaction dated Friday, May 16th. The stock was purchased at an average cost of $18.49 per share, for a total transaction of $110,940.00. Following the completion of the acquisition, the director owned 25,682 shares of the company's stock, valued at approximately $474,860.18. This trade represents a 30.48% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider Russell Devendorf bought 3,000 shares of the stock in a transaction dated Wednesday, May 21st. The shares were acquired at an average price of $16.80 per share, with a total value of $50,400.00. Following the completion of the acquisition, the insider directly owned 299,952 shares of the company's stock, valued at approximately $5,039,193.60. The trade was a 1.01% increase in their position. The disclosure for this purchase can be found here. Insiders bought a total of 40,652 shares of company stock valued at $748,964 over the last three months. 82.71% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the company. M&T Bank Corp raised its position in shares of Smith Douglas Homes by 8.4% during the 1st quarter. M&T Bank Corp now owns 11,001 shares of the company's stock valued at $215,000 after buying an additional 848 shares in the last quarter. Trexquant Investment LP purchased a new stake in shares of Smith Douglas Homes during the 4th quarter valued at about $218,000. PDT Partners LLC raised its position in shares of Smith Douglas Homes by 10.7% during the 1st quarter. PDT Partners LLC now owns 13,988 shares of the company's stock valued at $273,000 after buying an additional 1,349 shares in the last quarter. Victory Capital Management Inc. raised its position in shares of Smith Douglas Homes by 80.2% during the 1st quarter. Victory Capital Management Inc. now owns 14,395 shares of the company's stock valued at $281,000 after buying an additional 6,406 shares in the last quarter. Finally, Corton Capital Inc. raised its position in shares of Smith Douglas Homes by 41.0% during the 2nd quarter. Corton Capital Inc. now owns 20,752 shares of the company's stock valued at $403,000 after buying an additional 6,036 shares in the last quarter.

About Smith Douglas Homes

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.

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