Revenue contraction of 8.1% in 2026Q1 combined with NOI margin compression to 19.6% suggests significant pressure on core homebuilding profitability.
| Revenue | 952.84M | 971.12M | 975.46M | 764.63M | 755.35M | 518.86M |
| Revenue Growth % | -5.75% | -0.45% | 27.57% | 1.23% | 45.58% | - |
| Property Operating Expenses | 753.75M | 758.95M | 719.92M | 548.3M | 532.6M | 395.92M |
| Net Operating Income (NOI) | 199.09M | 212.17M | 255.54M | 216.33M | 222.75M | 122.95M |
| NOI Margin % | 20.89% | 21.85% | 26.2% | 28.29% | 29.49% | 23.7% |
| Operating Expenses | 142.69M | 139.78M | 136.38M | 92.44M | 83.01M | 64.23M |
| G&A Expenses | 142.69M | 139.78M | 136.38M | 92.44M | 83.01M | 64.23M |
| EBITDA | 58.46M | 74.94M | 120.98M | 124.97M | 140.61M | 60.17M |
| EBITDA Margin % | 6.14% | 7.72% | 12.4% | 16.34% | 18.62% | 11.6% |
| Depreciation & Amortization | 2.06M | 2.55M | 1.82M | 1.08M | 864K | 1.45M |
| D&A / Revenue % | 0.22% | 0.26% | 0.19% | 0.14% | 0.11% | 0.28% |
| Operating Income | 56.4M | 72.39M | 119.16M | 123.89M | 139.75M | 58.72M |
| Operating Margin % | 5.92% | 7.45% | 12.22% | 16.2% | 18.5% | 11.32% |
| Interest Expense | 3.38M | 3.19M | 2.49M | 1.66M | 997K | 1.73M |
| Interest Coverage | - | 22.66x | 47.96x | 75.29x | 141.87x | 37.08x |
| Non-Operating Income | -2M | 0 | -223K | -953K | -1.69M | -5.55M |
| Pretax Income | 55.65M | 70.9M | 116.89M | 123.18M | 146.05M | 62.53M |
| Pretax Margin % | 5.84% | 7.3% | 11.98% | 16.11% | 19.33% | 12.05% |
| Income Tax | 1.89M | 2.49M | 5.07M | 0 | 5.6M | 0 |
| Effective Tax Rate % | 3.39% | 3.51% | 4.33% | 0% | 3.84% | 0% |
| Net Income | 8.58M | 10.69M | 16.07M | 123.18M | 140.44M | 62.53M |
| Net Margin % | 0.9% | 1.1% | 1.65% | 16.11% | 18.59% | 12.05% |
| Net Income Growth % | -45.66% | -33.45% | -86.95% | -12.29% | 124.6% | - |
| Funds From Operations (FFO) | 11.5M | 13.24M | 17.89M | 124.26M | 141.31M | 63.98M |
| FFO Margin % | 1.21% | 1.36% | 1.83% | 16.25% | 18.71% | 12.33% |
| FFO Growth % | -143.14% | -26% | -85.6% | -12.06% | 120.85% | - |
| FFO per Share | 1.27 | 1.44 | 2.02 | 2.42 | 3.24 | 1.47 |
| FFO Payout Ratio % | 369.97% | 214.47% | 223.25% | 63.41% | 50.56% | 64.06% |
| EPS (Diluted) | 0.95 | 1.16 | 1.81 | 2.40 | 3.22 | 1.43 |
| EPS Growth % | -33.62% | -35.91% | -24.58% | -25.47% | 125.17% | - |
| EPS (Basic) | - | 1.19 | 1.82 | 13.92 | 15.88 | 7.07 |
| Diluted Shares Outstanding | 9.05M | 9.21M | 8.85M | 51.28M | 43.59M | 43.59M |
High interest rate sensitivity
As reported in recent financial filings, Smith Douglas Homes experienced a revenue decline of 8.1% in 2026Q1, reflecting a broader deceleration in top-line growth that contrasts sharply with the 40.6% expansion observed in 2024Q3, suggesting significant pressure on the company's core homebuilding delivery volume and absorption rates.
The shift from double-digit growth to contraction indicates that the company's reliance on entry-level buyers is increasingly vulnerable to current mortgage rate environments. Investors should monitor whether this trend represents a temporary seasonal lull or a structural inability to maintain delivery velocity in the competitive Southeastern markets.
Based on the company's reported figures, the NOI margin has compressed from a peak of 26.7% in 2024Q2 to 19.6% in 2026Q1, signaling that rising construction costs and potential pricing concessions are eroding the profitability of each home delivery within the current operating framework.
The consistent decline in NOI margins suggests that the asset-light model may be facing increased cost pressure from third-party land developers. This trend warrants further investigation into whether the company possesses sufficient pricing power to offset these rising input costs without further damaging absorption rates.
According to the provided income statement data, FFO has experienced extreme volatility, plummeting from $30.0 million in 2023Q4 to just $1.4 million in 2026Q1, which raises significant concerns regarding the sustainability of earnings and the company's ability to generate consistent cash flow for shareholders.
The sharp drop in FFO per share suggests that the company's earnings profile is highly sensitive to delivery timing and operational overhead. Analysts should scrutinize whether the current FFO levels are sufficient to cover capital requirements or if the company will need to adjust its capital allocation strategy.
Data analysis reveals that while the company maintains a low debt-to-equity ratio, the significant gap between FFO and net income, alongside declining NOI margins, suggests that the asset-light strategy may be masking underlying operational inefficiencies that could become more pronounced during a sustained housing market downturn.
The reliance on third-party land options may provide flexibility, but it also introduces a dependency on external developers that could limit supply during periods of financial stress. Investors should remain cautious, as the current margin profile appears to be trending toward levels that may not support long-term valuation premiums.
Quick answers to the most common questions about buying SDHC stock.
For fiscal year 2025, Smith Douglas Homes Corp. (SDHC) reported total revenue of $971.1M. This represents a 87.2% increase compared to $518.9M in 2021.
Smith Douglas Homes Corp. (SDHC) is profitable, generating $10.7M in net income for the fiscal year ending 2025 with a net profit margin of 1.1%.
Smith Douglas Homes Corp. (SDHC) reported an operating income of $72.4M, resulting in an operating profit margin of 7.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Smith Douglas Homes Corp. (SDHC) generated $212.2M in gross profit for the year, representing a gross profit margin of 21.8%. This demonstrates the company's core pricing power and production efficiency.