Smith Douglas Homes (NYSE:SDHC) Trading Down 5.4% - Should You Sell?

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) was down 5.4% during trading on Tuesday . The company traded as low as $20.07 and last traded at $19.66. Approximately 1,642 shares traded hands 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.

Wall Street Analysts Forecast Growth

A number of research analysts have issued reports on the company. JPMorgan Chase & Co. cut their price objective 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. Royal Bank Of Canada set a $16.00 target price on Smith Douglas Homes and gave the stock a "sector perform" rating in a report on Tuesday, May 20th. Wall Street Zen lowered Smith Douglas Homes from a "hold" rating to a "sell" rating in a report on Saturday, August 9th. Finally, Wedbush reaffirmed a "neutral" rating and issued a $18.00 price objective on shares of Smith Douglas Homes in a report on Wednesday, May 14th. Four analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, the company presently has an average rating of "Reduce" and a consensus price target of $18.90.

Smith Douglas Homes Price Performance

The company has a 50 day simple moving average of $19.96 and a 200-day simple moving average of $19.58. The stock has a market cap of $1.01 billion, a P/E ratio of 12.31, a price-to-earnings-growth ratio of 13.80 and a beta of 1.06.

Smith Douglas Homes (NYSE:SDHC - Get Free Report) last released its earnings results 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 company had revenue of $223.92 million during the quarter, compared to the consensus estimate of $216.01 million. Smith Douglas Homes had a net margin of 1.43% and a return on equity of 1.74%. As a group, research analysts expect 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 initiated a stock repurchase program on Wednesday, May 28th that permits the company to repurchase $50.00 million in shares. This repurchase authorization permits the company to buy up to 5.1% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company's board believes its shares are undervalued.

Insider Buying and Selling at Smith Douglas Homes

In other Smith Douglas Homes news, Director George Ervin Perdue III bought 1,400 shares of Smith Douglas Homes stock in a transaction on Friday, June 13th. The stock was acquired at an average price of $18.25 per share, with a total value of $25,550.00. Following the acquisition, the director owned 40,384 shares in the company, valued at approximately $737,008. This trade represents a 3.59% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. In the last quarter, insiders purchased 5,400 shares of company stock valued at $104,340. Corporate insiders own 82.71% of the company's stock.

Institutional Investors Weigh In On Smith Douglas Homes

Several large investors have recently made changes to their positions in SDHC. Wasatch Advisors LP boosted its position 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 buying an additional 53,358 shares during the period. Wellington Management Group LLP increased its position in shares of Smith Douglas Homes by 32.7% during the first quarter. Wellington Management Group LLP now owns 1,211,274 shares of the company's stock worth $23,644,000 after purchasing an additional 298,227 shares in the last quarter. Beck Mack & Oliver LLC increased its position in shares of Smith Douglas Homes by 20.2% in the 1st quarter. Beck Mack & Oliver LLC now owns 840,975 shares of the company's stock valued at $16,416,000 after acquiring an additional 141,545 shares during the period. Massachusetts Financial Services Co. MA boosted its stake in shares of Smith Douglas Homes by 11.6% during the 1st quarter. Massachusetts Financial Services Co. MA now owns 486,509 shares of the company's stock worth $9,497,000 after acquiring an additional 50,713 shares in the last quarter. Finally, First Eagle Investment Management LLC boosted its stake in shares of Smith Douglas Homes by 1.7% during the 2nd quarter. First Eagle Investment Management LLC now owns 240,382 shares of the company's stock worth $4,668,000 after acquiring an additional 4,000 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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