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Smith Douglas Homes Q3 profit drops as revenue stays flat in challenging market

By Reuters News


Overview

  • U.S. homebuilder's Q3 revenue was flat yr/yr as net income and EPS fell sharply

  • Company cites higher mortgage rates and affordability pressures for lower profitability

  • Net new home orders and backlog homes rose, while 28,370 shares were repurchased


Outlook

  • Company expects housing market conditions to remain challenging in the near term

  • Company remains focused on preserving liquidity and managing inventory amid weaker demand


Result Drivers

  • MORTGAGE RATES & AFFORDABILITY - Co said higher mortgage rates and affordability pressures weighed on buyer demand and profitability

  • COST MANAGEMENT - Co said it is focused on managing costs, building efficiently, and maintaining steady absorption pace

  • LAND-LIGHT MODEL - Co said its land-light operating model and efficient construction cycle times provide flexibility to manage weaker demand


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Net Income

$3.03 mln

Q3 Pretax Profit

$3.31 mln


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the homebuilding peer group is "hold"

  • Wall Street's median 12-month price target for Smith Douglas Homes Corp is $10.00, about 2% below its November 3 closing price of $10.20

  • The stock recently traded at 27 times the next 12-month earnings vs. a P/E of 26 three months ago


Reuters Recommended Reads

  • Nov 3 - Champion Homes Q2 sales slightly beat estimates

  • Nov 3 - LGI Homes Q3 adjusted EPS beats on higher closings, cost controls

  • Nov 4 - Trex Q3 net sales rise 26% on volumes, adjusted EPS beats estimates


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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