Analyst Rafe Jadrosich of Bank of America Securities reiterated a Hold rating on Smith Douglas Homes Corp. Class A (SDHC – Research Report), with a price target of $31.00.
Rafe Jadrosich has given his Hold rating due to a combination of factors including the performance of Smith Douglas Homes Corp. Class A (SDHC) in its fourth quarter which surpassed expectations and its overall alignment with annual forecasts despite facing delivery challenges. The company reported adjusted net income and home deliveries that were higher than anticipated, signaling strength in its closing performance and gross margins. This positive outcome in their inaugural earnings as a public company, along with a pricing of their initial public offering that was well-received, serves as a solid foundation for the Hold rating.
However, looking ahead, SDHC has provided guidance for the full year of 2024 that is somewhat less optimistic than previous estimates, mainly due to potential delays in community openings linked to municipality approvals and land development. These challenges could impact home deliveries, which are a core aspect of SDHC’s business. Moreover, the expected decline in return on equity in the near term as the company integrates a new acquisition and expands into new markets, coupled with higher land costs affecting gross margins, suggests a cautious approach. These factors collectively contribute to the decision to maintain a Neutral position on the stock while adjusting the price objective slightly higher to reflect industry peer multiples.
In another report released yesterday, Wedbush also maintained a Hold rating on the stock with a $23.00 price target.
See today’s best-performing stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Smith Douglas Homes Corp. Class A (SDHC) Company Description:
Smith Douglas Homes Corp. engages in the design, construction, and sale of single-family homes in the southeastern United States. The company operates in metropolitan Atlanta, Birmingham, Charlotte, Huntsville, Nashville, Raleigh-Durham, and Houston. It also provides closing, escrow, and title insurance services. The company was founded in 2008 and is headquartered in Woodstock, Georgia.
Read More on SDHC:
- Smith Douglas Homes reports FY23 home closings up 4.4% from FY22 at 2,297
- Smith Douglas Homes reports FY23 net income $123.2M, down 12.3% from FY22
- Smith Douglas Homes Issues Executive Performance Bonuses
- Charter downgraded, Cigna upgraded: Wall Street’s top analyst calls
- Smith Douglas Homes initiated with a Neutral at Wedbush
