United Homes Group, Inc. (NASDAQ: UHG)

Sector: Consumer Cyclical Industry: Residential Construction CIK: 0001830188
Market Cap 122.98 Mn
P/B 2.32
P/E -6.55
P/S 0.29
ROIC (Qtr) 0.38
Div Yield % 0.00
Rev 1y % (Qtr) -23.47
Total Debt (Qtr) 149.25 Mn
Debt/Equity (Qtr) 2.82
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About

United Homes Group, Inc. (UHG) operates in the homebuilding industry, with its main business activities centered around designing, building, and selling single-family homes in high-growth markets across the southeastern United States. Specifically, UHG has a significant presence in South Carolina, North Carolina, and Georgia. In terms of revenue generation, UHG offers a range of single-family homes, including entry-level, first-time move-up, second-time move-up, and third-time move-up products. These homes are designed to cater to the needs of...

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Investment thesis

Bull case

  • Robust free cash flow of 5.32M exceeds capital expenditure of 1.11M by 4.80x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 283.83M provides 30.59x coverage of intangibles 9.28M, indicating robust asset quality.
  • Operating cash flow of 6.42M provides strong 5.80x coverage of capital expenditure 1.11M, enabling organic growth.
  • Cash position of 27.11M fully covers payables of 21.99M by 1.23x, showing strong vendor relationship management.
  • Tangible assets of 283.83M provide robust 41.88x coverage of receivables 6.78M, showing strong asset quality.

Bear case

  • Operating cash flow of 6.42M barely covers its investment activities of (1.02M), with a coverage ratio of -6.27, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 27.11M against inventory of 175.88M, the 0.15 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • The company's operating cash flow of 6.42M shows concerning coverage of stock compensation expenses of 6.65M, with a 0.97 ratio indicating potential earnings quality issues.
  • Operating earnings of (28.40M) show weak coverage of depreciation charges of 1.89M, with a -15.06 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 6.42M provides minimal -0.67x coverage of tax expenses of (9.61M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Residential Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DHI Horton D R Inc /De/ 56.51 Bn 105.92 7.04 5.55 Bn
2 TOL Toll Brothers, Inc. 29.11 Bn 76.92 7.08 2.79 Bn
3 PHM Pultegroup Inc/Mi/ 28.02 Bn 12.63 1.62 2.16 Bn
4 LEN Lennar Corp /New/ 23.56 Bn -229.13 7.79 4.08 Bn
5 NVR Nvr Inc 21.52 Bn 16.06 2.13 1.05 Bn
6 IBP Installed Building Products, Inc. 8.62 Bn -487.54 19.34 0.99 Bn
7 TMHC Taylor Morrison Home Corp 6.86 Bn 8.06 0.82 2.26 Bn
8 MTH Meritage Homes CORP 5.67 Bn 12.52 0.97 1.83 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.75 1.47
EV to Cash from Ops. EV/CFO 34.08 43.01
EV to Debt EV to Debt 1.47 37.82
EV to EBIT EV/EBIT -7.71 48.76
EV to EBITDA EV/EBITDA 82.14 112.58
EV to Free Cash Flow [EV/FCF] EV/FCF 41.18 11.82
EV to Market Cap EV to Market Cap 1.78 1.26
EV to Revenue EV/Rev 0.52 3.28
Price to Book Value [P/B] P/B 2.32 9.23
Price to Earnings [P/E] P/E -6.55 -14.72
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 8.23
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 6.29
Dividend per Basic Share Div per Share (Qtr) 0.00 0.54
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 96.10
Interest Coverage Interest Coverage 0.00 142.03
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -964.39 27.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 4.98 196.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.02
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 7.90 -29.39
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -66.16 -30.05
EBIT Growth (1y) % EBIT 1y % (Qtr) -35.96 -31.27
EBT Growth (1y) % EBT 1y % (Qtr) -35.96 -32.05
EPS Growth (1y) % EPS 1y % (Qtr) 44.07 -25.62
FCF Growth (1y) % FCF 1y % (Qtr) 118.13 341.90
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.80 -14.63
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.43 1.00
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.00 0.23
Current Ratio Curr Ratio (Qtr) 0.00 0.81
Debt to Equity Ratio Debt/Equity (Qtr) 2.82 0.58
Interest Cover Ratio Interest Cover Ratio 0.00 142.03
Times Interest Earned Times Interest Earned 0.00 142.03
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -6.30 10.57
EBIT Margin % EBIT Margin % (Qtr) -6.79 9.64
EBT Margin % EBT Margin % (Qtr) -6.79 9.44
Gross Margin % Gross Margin % (Qtr) 17.20 22.26
Net Profit Margin % Net Margin % (Qtr) -4.50 7.17