Smith & Wesson Brands (SWBI) AI Stock Analysis

• Market Cap: $457.84M
• Dividend Yield: 5.1%
• Average Volume (3M): 598.95K
• Price to Earnings (P/E): 47.8
• Beta (1Y): 0.51
• Revenue Growth: -9.08%
• EPS Growth: -71.62%
• Country: US
• Employees: 1,501
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.04
• Shares Outstanding: 44,493,744
• 10 Day Avg. Volume: 821,562
• 30 Day Avg. Volume: 598,947
• PEG Ratio: -0.48
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 0.88
• P/FCF Ratio: -14.46
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 4.34
• Enterprise Value/Ebitda: 11.93
• 1Y Price Target: $11.00
• Price Target Upside: 3.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $11.50 ▲(8.29% Upside)

Smith & Wesson Brands' overall score is driven by strong financial resilience and operational efficiency despite revenue and profitability challenges. Technical indicators suggest overbought conditions, while valuation metrics indicate the stock may be overvalued. The earnings call highlighted both strengths in product innovation and inventory management, and challenges in sales and margins.

Positive Factors

New Product Success

The significant contribution of new products to sales highlights the company's effective innovation strategy, which can drive future growth and strengthen its market position.

Inventory Management

Successful inventory management improves cash flow and operational efficiency, positioning the company to better manage production and sales cycles.

Cash Flow Improvement

Strong cash flow generation supports financial flexibility, enabling investment in growth opportunities and providing a buffer against market volatility.

Negative Factors

Decline in Net Sales

The decline in net sales indicates challenges in maintaining revenue growth, which could impact the company's ability to sustain its market position.

Gross Margin Pressure

Reduced gross margins suggest profitability challenges, potentially affecting long-term financial health and investment capacity.

Increased Tariff Costs

Rising tariff costs can erode profit margins and increase operational expenses, posing a risk to the company's cost structure and competitiveness.

Smith & Wesson Brands Business Overview & Revenue Model

Company Description

Smith & Wesson Brands, Inc. designs, manufactures, and sells firearms worldwide. The company offers handguns, including revolvers and pistols; long guns, such as modern sporting rifles, bolt action rifles; handcuffs; suppressors; and other firearm-related products under the Smith & Wesson, M&P, and Gemtech brands. It also provides manufacturing services comprising forging, heat treating, rapid prototyping, tooling, finishing, plating, machining, and custom plastic injection molding to other businesses under the Smith & Wesson and Smith & Wesson Precision Components brand names; and sells parts purchased through third parties. The company sells its products to firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement, security agencies and officers, and military agencies. It markets its products through independent dealers, retailers, in-store retails, and direct to consumers; print, broadcast, and digital advertising campaigns; social and electronic media; and in-store retail merchandising strategies. Smith & Wesson Brands, Inc. was founded in 1852 and is based in Springfield, Massachusetts.

How the Company Makes Money

Smith & Wesson generates revenue through the sale of its firearms and ammunition, which constitute its primary revenue stream. The company sells its products directly to consumers, as well as through a network of distributors, retailers, and law enforcement agencies. Additionally, SWBI benefits from government contracts and military sales, which often provide significant revenue opportunities. The company also earns income from licensing agreements and partnerships within the firearms and outdoor recreation sectors. Seasonal demand, particularly during hunting seasons and in response to legislative changes affecting gun ownership, further influences its sales performance. Overall, the diverse product range and strategic partnerships are key contributors to Smith & Wesson's earnings.

Smith & Wesson Brands Financial Statement Overview

Summary

Smith & Wesson Brands is facing financial challenges with declining revenues and profitability margins. The balance sheet remains relatively stable, but increasing leverage and reduced cash flow generation pose risks. The company needs to address these issues to improve financial health and operational performance.

Income Statement

Smith & Wesson Brands has experienced a significant decline in revenue, with a TTM revenue growth rate of -68.6%. Margins have also contracted, with the TTM gross profit margin at 26.5% and net profit margin at 2.6%, both lower than previous periods. The EBIT and EBITDA margins have also decreased, indicating reduced operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.36 in the TTM, indicating rising leverage, though it remains at a manageable level. Return on equity has decreased to 3.3%, reflecting lower profitability. The equity ratio is stable, suggesting a solid capital structure.

Cash Flow

Free cash flow has declined significantly, with a TTM growth rate of -110.7%. The operating cash flow to net income ratio is low at 0.29, indicating potential cash flow challenges. The free cash flow to net income ratio is also low, suggesting limited cash generation relative to earnings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	474.66M	535.83M	479.24M	864.13M	1.06B
Gross Profit	127.18M	158.09M	154.54M	374.56M	448.98M
EBITDA	55.71M	84.01M	81.10M	281.64M	350.32M
Net Income	13.43M	39.61M	36.88M	194.49M	252.05M
Balance Sheet
Total Assets	559.61M	577.43M	541.29M	497.48M	446.39M
Cash, Cash Equivalents and Short-Term Investments	25.23M	60.84M	53.56M	120.73M	113.02M
Total Debt	114.73M	77.80M	64.46M	40.28M	41.18M
Total Liabilities	187.16M	177.51M	156.67M	136.96M	180.00M
Stockholders Equity	372.45M	399.91M	384.62M	360.51M	266.38M
Cash Flow
Free Cash Flow	-29.02M	15.79M	-73.17M	113.56M	292.65M
Operating Cash Flow	-7.22M	106.74M	16.73M	137.81M	315.33M
Investing Cash Flow	-19.17M	-81.49M	-89.78M	-24.12M	-23.40M
Financing Cash Flow	-9.21M	-17.97M	5.88M	-105.99M	-303.92M

Smith & Wesson Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWBI, the sentiment is Positive. The current price of 10.62 is above the 20-day moving average (MA) of 10.32, above the 50-day MA of 9.49, and above the 200-day MA of 9.02, indicating a bullish trend. The MACD of 0.19 indicates Positive momentum. The RSI at 66.31 is Neutral, neither overbought nor oversold. The STOCH value of 83.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWBI.

Smith & Wesson Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKE	68 Neutral	$451.66M	64.57	6.76%	2.53%	7.63%	7.09%
BYRN	66 Neutral	$390.65M	25.91	29.71%	―	50.99%	612.36%
SWBI	64 Neutral	$457.84M	47.84	2.71%	5.10%	-9.08%	-71.62%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RGR	60 Neutral	$560.12M	281.53	0.87%	1.92%	3.90%	-92.10%
VTSI	55 Neutral	$51.30M	-89.61	-1.26%	―	-23.87%	-109.71%
POWW	45 Neutral	$210.80M	-3.44	―	―	-11.01%	-279.70%