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Investing.com - DA Davidson has reiterated its Neutral rating and $4.00 price target on Southland Holdings (NYSE:SLND), citing ongoing financial variability in the company’s project portfolio. The stock, which has seen a 22.8% gain over the past six months despite a recent 14% weekly decline, currently trades below InvestingPro’s Fair Value estimate.
The research firm pointed to significant variability in financial results related to M&P and non-M&P legacy projects, as well as settlement disputes that continue to impact performance predictability.
DA Davidson noted that new bookings are gradually replacing legacy work in the company’s backlog, which should lead to higher margins in the future, though the firm is lowering its second-half estimates to maintain conservatism given execution challenges on legacy projects.
Southland Holdings reported cash holdings of $63.3 million including restricted cash, while total debt stood at $278.6 million, according to the research note.
The company continues to struggle with free cash flow generation, reporting negative FCF in the second quarter and negative $21 million on a trailing twelve-month basis, with DA Davidson noting that elevated interest costs compared to historical operating earnings remain a challenge despite potential improvements from reduced project losses.
In other recent news, Southland Holdings Inc. reported mixed results for the second quarter of 2025. The company’s revenue decreased to $215 million, down by $36 million compared to the previous year. Despite the drop in revenue, Southland Holdings experienced a significant improvement in its gross profit margin, which rose to 6.2% from a negative 15.9% the year prior. However, the company faced a net loss of $10.3 million during this period. These financial results have raised concerns among investors. The market reacted to these developments, although specific stock price movements are not detailed here. These recent developments highlight the challenges and progress Southland Holdings has encountered in its financial performance.
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