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what it is
Smith Douglas builds and sells entry-level and empty-nester homes in Southern and Sun Belt markets.
how it gets paid
Last year Smith Douglas Homes made $971M in revenue.
why growth slowed
Revenue fell 0.4% last year. 22.6% gross margin matters because every point on $711M is about $7.1M of gross profit.
what just happened
The latest quarter brought $711M of revenue and 22.6% gross margin.
At a glance
B+ balance sheet — decent shape, but not bulletproof
13.4x trailing p/e — the market's not buying it — or you found a deal
21.8% return on capital — every dollar works hard here
$1.81 fy2024 eps est
$50M fy2025 rev est
xvary composite: 51/100 — below average
What they do
Smith Douglas builds and sells entry-level and empty-nester homes in Southern and Sun Belt markets.
You are buying a builder that has already served 18,000 families. That is a real customer base, not a logo. It sells below the FHA loan limit, which means the homes sit inside the government-backed mortgage cap. So what: your buyers have more ways to qualify than luxury buyers do.
How they make money
$971M
annual revenue · revenue declined -0.4% last year
total revenue
$971M
0.4%
The products that matter
builds and sells finished homes
Single-Family Home Construction
2,908 homes delivered
it delivered a record 2,908 homes in 2025, but Q4 revenue still fell 9%. volume showed up. earnings did not.
record deliveries
controls lot supply and build timing
Land Development & Lot Position
6,400-home backlog
4,500 backlog homes are sold and 1,900 are spec builds. sold backlog gives you visibility. spec backlog gives you inventory risk.
4,500 sold
serves rate-sensitive buyers
Affordable Buyer Exposure
15–20% buyer pool impact
higher mortgage rates priced out an estimated 15–20% of its buyer pool in 2025. your customer is the first one rates hit.
rate-sensitive demand
Key numbers
$971M
annual revenue
That is the size of the whole business. Flat revenue means the machine is not growing on its own.
2,867
2024 closings
That is the clearest proof of demand. More closings mean more homes delivered and more cash collected.
21.8%
return on capital
For every dollar tied up in the business, the company turns 21.8 cents into operating profit. That is solid for a cyclical builder.
13.4x
trailing p/e
You are paying 13.4 times trailing earnings. That is not expensive, but it is not a free pass either.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 20 / 100
- long-term debt $55M (8% of capital)
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for SDHC right now.
source: institutional data · return history unavailable
What just happened
beat estimates
The latest quarter brought $711M of revenue and 22.6% gross margin.
Revenue rose 171% from the prior-year quarter. The base was tiny, so the margin line matters more than the headline jump.
$711M
revenue
$0.78
eps
22.6%
gross margin
the number that mattered
22.6% gross margin matters because every point on $711M is about $7.1M of gross profit.
source: company earnings report, 2026
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What could go wrong
the #1 risk is gross margin erosion on affordable homes.
med
Gross margin keeps doing the damage
Q4 is the proof beat: $260M of revenue beat estimates by 3.7%, and EPS still fell to a $0.16 loss. When direct costs move the wrong way, a builder can sell more and earn less.
22.6% gross margin is healthy on paper. If it keeps slipping, the 13.4x p/e will not stay low for a good reason.
med
Spec inventory turns into working-capital drag
1,900 of the 6,400 backlog homes are spec builds. Those units help if demand is strong. If demand softens, they tie up capital and pressure pricing.
You have visibility from the 4,500 sold homes. You also have unsold inventory risk wearing the same hard hat.
med
Mortgage rates hit the customer first
Higher mortgage rates priced out an estimated 15–20% of the buyer pool in 2025. Smith Douglas serves customers who feel affordability stress fast.
This exposes demand, backlog refresh, and eventual pricing all at once.
1,900 of the 6,400 backlog homes are spec builds. If sales pace slows and 22.6% gross margin slips again, the cheap-looking multiple stops looking cheap.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
backlog conversion from the 4,500 sold homes
This is the cleanest read on execution. If sold backlog converts smoothly, revenue visibility is real. If it stalls, the backlog headline loses its charm.
calendar
Q1 2026 earnings report
Scheduled for August 7, 2026. You want to see whether the Q4 earnings miss was a one-quarter stumble or a margin pattern.
trend
spring selling season traffic
Management pointed to encouraging early-2026 traffic and order activity. The catch is whether that holds once mortgage math hits the buyer.
risk
gross margin versus spec inventory
Watch these together, not apart. Rising spec inventory with weaker margin is how a backlog story turns into an inventory story.
Analyst rankings
risk profile
average
risk rank 3 — typical risk profile — neither especially safe nor risky.
chart momentum
below average
momentum rank 4 — analysts see underperformance risk in the near term.
source: institutional data
Institutional activity
institutional ownership data for SDHC is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$17
current price
n/a
target midpoint · n/a from current
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