Smith Douglas Homes (NYSE:SDHC) Shares Down 5.4% - Here's Why

Key Points

• Smith Douglas Homes Corp. (NYSE:SDHC) saw its stock drop 5.4% to $19.66, with trading volume significantly lower at approximately 1,642 shares compared to the average of 75,447 shares.
• Analysts have recently downgraded their ratings on the stock, with JPMorgan cutting its price target from $24.00 to $18.50 and Wall Street Zen reducing its rating from "hold" to "sell."
• Smith Douglas Homes missed quarterly earnings expectations, reporting a loss of ($0.13) earnings per share against a consensus estimate of $0.25, despite having revenue above expectations at $223.92 million.

Smith Douglas Homes Corp. (NYSE:SDHC - Get Free Report) shares dropped 5.4% during trading on Tuesday . The stock traded as low as $20.07 and last traded at $19.66. Approximately 1,642 shares were traded during mid-day trading, a decline of 98% from the average daily volume of 75,447 shares. The stock had previously closed at $20.79.

Analysts Set New Price Targets

SDHC has been the subject of several analyst reports. JPMorgan Chase & Co. cut their price objective on shares of Smith Douglas Homes from $24.00 to $18.50 and set a "neutral" rating for the company in a report on Wednesday, May 21st. 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. Finally, Royal Bank Of Canada set a $16.00 target price on shares of Smith Douglas Homes and gave the stock a "sector perform" rating in a research note on Tuesday, May 20th. Four investment analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Reduce" and a consensus target price of $18.90.

Smith Douglas Homes Stock Performance

The stock has a market cap of $992.73 million, a PE ratio of 12.14, a PEG ratio of 12.79 and a beta of 1.06. The company's 50-day moving average price is $19.89 and its two-hundred day moving average price is $19.51.

Smith Douglas Homes (NYSE:SDHC - Get Free Report) last released 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 return on equity of 1.74% and a net margin of 1.43%.The company had revenue of $223.92 million during the quarter, compared to analysts' expectations of $216.01 million. Equities research analysts forecast that Smith Douglas Homes Corp. will post 1.73 earnings per share for the current fiscal year.

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

Institutional Investors Weigh In On Smith Douglas Homes

Large investors have recently modified their holdings of the stock. Tower Research Capital LLC TRC purchased a new position in Smith Douglas Homes during the second quarter valued at $90,000. Wasatch Advisors LP lifted its holdings in shares of Smith Douglas Homes by 4.4% during the second quarter. Wasatch Advisors LP now owns 1,279,357 shares of the company's stock valued at $24,845,000 after purchasing an additional 53,358 shares in the last quarter. Raymond James Financial Inc. purchased a new stake in shares of Smith Douglas Homes during the second quarter valued at $34,000. Marshall Wace LLP bought a new stake in Smith Douglas Homes in the 2nd quarter worth about $644,000. Finally, First Trust Advisors LP raised its position in Smith Douglas Homes by 5.8% in the 2nd quarter. First Trust Advisors LP now owns 29,025 shares of the company's stock worth $564,000 after buying an additional 1,583 shares during the last quarter.

Smith Douglas Homes Company Profile

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.