SDHC Earnings Prediction
The chart below shows how SDHC performed 10 days before and after its earnings report, based on data from the past quarters. Typically, SDHC sees a +1.40% change in stock price 10 days leading up to the earnings, and a -5.24% change 10 days following the report. On the earnings day itself, the stock moves by +0.58%. This data can give you a slight idea of what to expect for the next quarter's release.
SDHC Key Earning Data
2024/Q4
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SDHC Earnings Analysis
Smith Douglas Homes Corp Corporation (SDHC.N) Earnings Conference Call
Positive
Pre-Tax Income Achievement: Smith Douglas Homes reported pre-tax income of $30 million in Q4 2024, capping off a profitable year with nearly $117 million in pre-tax income.
Record Home Deliveries: The company delivered a record 836 homes in Q4 2024, exceeding guidance and contributing to a total of 2,867 homes delivered for the full year.
Gross Margin Performance: Gross margins for Q4 were 25.5%, aligning with expectations, and averaged 26.2% for the full year, indicating strong profitability.
Adjusted Return on Equity: The adjusted return on equity for 2024 was 29%, significantly above the industry average for publicly traded home builders.
Net New Orders Growth: The company generated 569 net new orders in Q4, utilizing price incentives and closing cost support effectively to address affordability issues.
Construction Efficiency Improvement: Cycle times improved to approximately 55 working days, excluding the Houston division, showcasing enhanced construction efficiency.
Controlled Lots Strategy: Smith Douglas ended the year with 19,522 controlled lots, with 96% controlled via auction agreement, reflecting a capital-efficient land-light strategy.
Q4 Revenue Surge: Revenue for Q4 was $287 million, a 32% increase year-over-year, with an average sales price of $344,000 for closed homes.
Strong Financial Position: The company maintained a strong balance sheet with $22 million in cash, no borrowings under its credit facility, and a low debt-to-book capitalization of 0.8%.
Home Closings Forecast Increase: For Q1 2025, the company anticipates home closings between 625 and 675 homes, representing a 15% increase over the previous year.
Negative
Sales Challenges and Affordability: The company faced challenges with affordability for buyers, which negatively impacted sales despite some incentives offered.
Gross Margin Decline: Gross margins decreased from 28.3% in 2023 to 26.2% in 2024, primarily due to increased average lot costs and higher discounts and closing costs.
Mortgage Rate Increase: The anticipated relief in mortgage rates did not materialize, with rates increasing throughout the fourth quarter and into January, reaching over 7%.
Slow January Sales: Sales started off slow in January 2025, which could indicate potential ongoing demand issues in the housing market.
Gross Margin Decline Forecast: The company expects gross margins for the first quarter of 2025 to decline further to between 23.25% and 23.75%.
Macroeconomic Risks Ahead: There are macroeconomic uncertainties, including interest rates and tariffs, that could pose risks to future performance and sales projections.
SDHC FAQs
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SDHC Earning Call Sentiment
Smith Douglas Homes Corp. (NYSE:SDHC) Q4 2024 Earnings Call Transcript
SDHC.N
0.26%Positive
The earnings call reflects mixed sentiments. Positive aspects include record new home deliveries, significant revenue growth, and a mortgage joint venture. However, concerns arise from declining gross margins, ongoing cost pressures, and the use of incentives to maintain sales, which could impact future profitability. The Q&A highlighted uncertainties in margins and cost inflation risks. Despite strong financial performance, guidance suggests potential margin compression, balancing the positive outlook. Without market cap details, a neutral impact is predicted, as positives and negatives are evenly weighted.
