Smith Douglas Homes Corp. (NYSE: SDHC) has announced a stock repurchase program for up to $50.0 million of the company’s class A common stock. This move reflects the company's belief that its share price may be undervalued relative to its long-term opportunity. The company plans to fund the repurchase program from existing cash and cash equivalents and/or future cash flows.
Smith Douglas Homes completed its initial public offering in January 2024 and has been entrusted by over 17,500 families to fulfill their new home dreams. In 2024, the company achieved 2,867 closings and currently holds the #32 position on the Builder Magazine Top 100 list. The company's communities are primarily targeted to entry-level and empty-nest homebuyers in various metro areas.
The specifics of the stock repurchase program include the authorization for the company to make repurchases through open market purchases, block trades, privately negotiated transactions, accelerated stock repurchase transactions, or by other means. The company may also enter into rule 10b5-1 plans to facilitate repurchases under this authorization. The volume, timing, and manner of any repurchases will be determined at the company’s discretion, subject to general market conditions and other factors.
It's worth noting that the repurchase program does not obligate the company to repurchase any specific amount of common stock, has no time limit, and may be modified, suspended, or discontinued at any time without notice at the discretion of the board of directors. This decision underscores the company's commitment to evaluating the strategic deployment of its capital where it believes it can generate shareholder value. Following these announcements, the company's shares moved -2.5%, and are now trading at a price of $17.55. For the full picture, make sure to review Smith Douglas Homes's 8-K report.
