Smith Douglas Homes (NYSE:SDHC) Shares Down 8.3% - Here's Why

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.

Smith Douglas Homes Corp. (NYSE:SDHC - Get Free Report)'s share price traded down 8.3% on Monday . The company traded as low as $17.11 and last traded at $16.86. 28,150 shares were traded during trading, a decline of 63% from the average session volume of 76,526 shares. The stock had previously closed at $18.39.

Wall Street Analyst Weigh In

Several analysts have commented on the stock. Wedbush reissued a "neutral" rating and set a $18.00 price target on shares of Smith Douglas Homes in a research report on Wednesday, May 14th. Wall Street Zen cut shares of Smith Douglas Homes from a "hold" rating to a "sell" rating in a research note on Saturday, August 9th. JPMorgan Chase & Co. decreased their price target on Smith Douglas Homes from $24.00 to $18.50 and set a "neutral" rating for the company in a report on Wednesday, May 21st. Finally, Royal Bank Of Canada set a $16.00 target price on Smith Douglas Homes and gave the company a "sector perform" rating in a research report on Tuesday, May 20th. Two investment analysts have rated the stock with a sell rating and four have given a hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Hold" and an average target price of $18.90.

Smith Douglas Homes Price Performance

The company has a market cap of $1.04 billion, a price-to-earnings ratio of 12.70, a PEG ratio of 12.51 and a beta of 1.05. The firm has a 50 day simple moving average of $19.60 and a 200-day simple moving average of $20.04.

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

Smith Douglas Homes announced that its board has authorized a stock buyback plan on Wednesday, May 28th that permits the company to repurchase $50.00 million in shares. This repurchase authorization permits the company to repurchase up to 5.1% of its shares through open market purchases. Shares repurchase plans are often a sign that the company's board believes its shares are undervalued.

Insider Activity at Smith Douglas Homes

In other Smith Douglas Homes news, Director Neill B. Faucett bought 7,000 shares of the business's stock in a transaction dated Friday, May 23rd. The shares were acquired at an average cost of $17.36 per share, with a total value of $121,520.00. Following the acquisition, the director directly owned 14,505 shares of the company's stock, valued at $251,806.80. The trade was a 93.27% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director George Ervin Perdue III acquired 1,400 shares of the stock in a transaction on Friday, June 13th. The shares were acquired at an average cost of $18.25 per share, for a total transaction of $25,550.00. Following the completion of the transaction, the director directly owned 40,384 shares in the company, valued at $737,008. The trade was a 3.59% increase in their position. The disclosure for this purchase can be found here. Insiders bought a total of 34,652 shares of company stock valued at $638,024 in the last three months. 82.71% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in the company. Raymond James Financial Inc. purchased a new position in shares of Smith Douglas Homes during the 2nd quarter worth approximately $34,000. Tower Research Capital LLC TRC acquired a new position in Smith Douglas Homes during the second quarter worth $90,000. M&T Bank Corp boosted its position in Smith Douglas Homes by 8.4% during the first quarter. M&T Bank Corp now owns 11,001 shares of the company's stock worth $215,000 after purchasing an additional 848 shares in the last quarter. PDT Partners LLC raised its stake 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 worth $273,000 after buying an additional 1,349 shares during the last quarter. Finally, Victory Capital Management Inc. raised its position in Smith Douglas Homes by 80.2% during the first quarter. Victory Capital Management Inc. now owns 14,395 shares of the company's stock worth $281,000 after acquiring an additional 6,406 shares during 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.