Smith Midland Corp (NASDAQ: SMID)

Sector: Basic Materials Industry: Building Materials CIK: 0000924719
Market Cap 174.05 Mn
P/B 3.34
P/E 14.78
P/S 1.96
ROIC (Qtr) 20.94
Div Yield % 0.00
Rev 1y % (Qtr) -9.04
Total Debt (Qtr) 4.69 Mn
Debt/Equity (Qtr) 0.09
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About

Investment thesis

Bull case

  • Strong operating cash flow of 11.07M provides robust 2.36x coverage of total debt 4.69M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 13.38M provide 19.76x coverage of short-term debt 677000, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 11.07M provides exceptional 51.01x coverage of interest expenses 217000, showing strong debt service capability.
  • Operating cash flow of 11.07M provides strong 614.94x coverage of stock compensation 18000, indicating sustainable incentive practices.
  • Strong tangible asset base of 85.44M provides 18.22x coverage of total debt 4.69M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 11.07M barely covers its investment activities of (6.01M), with a coverage ratio of -1.84, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 11.07M provides insufficient coverage of deferred revenue obligations of 14.47M, which is 0.76x, raising concerns about future service delivery capabilities.
  • High receivables of 26.86M relative to inventory of 7.89M (3.40 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 5.05M represents just -7.30x of debt issuance (692000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Tax assets of 0 provide limited offset against tax liabilities of 3.14M, which is 0x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Building Materials
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CRH Crh Public Ltd Co 82.74 Bn 24.11 2.24 20.15 Bn
2 VMC Vulcan Materials CO 39.95 Bn 35.72 5.07 4.87 Bn
3 MLM Martin Marietta Materials Inc 30.94 Bn 212.27 13.41 5.90 Bn
4 JHX James Hardie Industries plc 11.15 Bn 93.63 2.53 4.86 Bn
5 EXP Eagle Materials Inc 7.43 Bn 17.29 3.23 1.80 Bn
6 KNF Knife River Corp 5.32 Bn 35.87 1.75 1.24 Bn
7 USLM United States Lime & Minerals Inc 3.38 Bn 216.45 27.53 0.00 Bn
8 TTAM Titan America SA 3.19 Bn 19.19 1.95 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.01 1.41
EV to Cash from Ops. EV/CFO 15.52 23.36
EV to Debt EV to Debt 36.63 58.70
EV to EBIT EV/EBIT 10.89 27.99
EV to EBITDA EV/EBITDA 9.43 17.60
EV to Free Cash Flow [EV/FCF] EV/FCF 33.99 29.87
EV to Market Cap EV to Market Cap 0.99 0.53
EV to Revenue EV/Rev 1.93 4.30
Price to Book Value [P/B] P/B 3.34 5.38
Price to Earnings [P/E] P/E 14.78 46.84
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 3.00
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.53
Dividend per Basic Share Div per Share (Qtr) 0.00 0.43
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.56
Interest Coverage Int. cover (Qtr) 72.69 14.54
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.59 -813.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 48.41 438.80
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -5.93
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 78.45 -73.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 63.00 -66.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 79.31 -59.38
EBT Growth (1y) % EBT 1y % (Qtr) 81.76 -52.02
EPS Growth (1y) % EPS 1y % (Qtr) 82.79 -67.29
FCF Growth (1y) % FCF 1y % (Qtr) 34.12 -5.79
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 32.87 12.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.04 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.74 1.32
Current Ratio Curr Ratio (Qtr) 2.76 2.95
Debt to Equity Ratio Debt/Equity (Qtr) 0.09 0.52
Interest Cover Ratio Int Coverage (Qtr) 72.69 14.54
Times Interest Earned Times Interest Earned (Qtr) 72.69 14.54
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 20.70 -43.04
EBIT Margin % EBIT Margin % (Qtr) 17.75 -72.64
EBT Margin % EBT Margin % (Qtr) 17.51 -77.34
Gross Margin % Gross Margin % (Qtr) 28.00 30.03
Net Profit Margin % Net Margin % (Qtr) 13.20 -82.01