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Smith & Wesson Brands, Inc. (SWBI)
NASDAQ:SWBI
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Smith & Wesson Brands
(NASDAQ:SWBI)
62Neutral
Smith & Wesson Brands (SWBI) vs. S&P 500 (SPY)
Market Cap
$414.95M
Dividend Yield5.51%
Average Volume (3M)457.87K
Price to Earnings (P/E)14.5
Beta (1Y)0.11
Revenue Growth-5.77%
EPS Growth14.45%
CountryUS
Employees1,501
SectorIndustrials
Sector Strength83
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.02
Shares Outstanding44,002,705
10 Day Avg. Volume424,023
30 Day Avg. Volume457,874
Financial Highlights & Ratios
PEG Ratio-0.77
Price to Book (P/B)1.11
Price to Sales (P/S)0.00
P/FCF Ratio-24.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.25Price Target Upside51.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Smith & Wesson Brands Business Overview & Revenue Model
Company DescriptionSmith & 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 MoneySmith & Wesson Brands, Inc. generates revenue primarily through the sale of firearms and firearm-related accessories. The company's key revenue streams include handguns, such as revolvers and pistols, as well as long guns, which comprise rifles and shotguns. Additionally, Smith & Wesson offers a range of firearm accessories and branded merchandise. The company's earnings are significantly influenced by factors such as consumer demand, regulatory changes, and its ability to maintain a prominent position in the firearms market. Smith & Wesson also engages in partnerships and distribution agreements to extend its market reach, ensuring its products are available through various channels, including direct sales to law enforcement and military agencies, as well as through a network of dealers and retailers.
Smith & Wesson Brands Financial Statement Overview
Summary
Smith & Wesson Brands presents a mixed financial picture. While the balance sheet is robust with no debt and strong equity support, the income statement reflects declining revenue and profitability trends. The cash flow statement highlights recent challenges in cash generation, despite past positive performances. The company should focus on enhancing operational efficiencies and cash flow management to sustain its financial stability.Income Statement
Smith & Wesson Brands has shown fluctuating revenue trends, with a noticeable decline in recent years from its peak in 2021. The gross profit margin for TTM (Trailing-Twelve-Months) is approximately 29.65%, while the net profit margin stands at 6.05%, indicating moderate profitability. The EBIT and EBITDA margins are also modest at 7.00% and 11.82%, respectively, reflecting tight operational efficiencies. Overall, the income statement suggests stable but declining performance with room for improvement in operational margins.65
Positive
Balance Sheet
The balance sheet of Smith & Wesson Brands shows a solid equity position with zero total debt in the latest TTM period, resulting in a healthy debt-to-equity ratio of 0. The return on equity (ROE) for TTM is 8.19%, demonstrating reasonable returns for shareholders. The equity ratio stands at 62.92%, highlighting a strong equity base compared to total assets. These metrics indicate a stable financial structure with low leverage and robust shareholder equity.75
Positive
Cash Flow
The cash flow statement reveals challenges in cash generation, with negative free cash flow of -$10.03 million in the latest TTM period. The operating cash flow to net income ratio is negative, indicating issues in converting income into cash. The free cash flow to net income ratio is also negative, reflecting cash flow pressures. The company has previously demonstrated positive cash flows, but recent periods suggest a need for better cash management strategies.50
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 493.05M | 535.83M | 479.24M | 864.13M | 1.06B | 678.39M | Gross Profit |
| 146.19M | 158.09M | 154.54M | 374.56M | 448.98M | 234.71M | EBIT |
| 34.52M | 44.78M | 48.41M | 251.65M | 319.63M | 49.93M | EBITDA |
| 65.86M | 84.01M | 81.10M | 251.65M | 319.63M | 81.59M | Net Income Common Stockholders |
| 29.80M | 39.61M | 36.88M | 194.49M | 252.05M | -61.23M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.70M | 60.84M | 53.56M | 120.73M | 113.02M | 125.40M | Total Assets |
| 578.86M | 578.00M | 541.29M | 497.48M | 446.39M | 728.96M | Total Debt |
| 145.10M | 78.37M | 61.75M | 40.28M | 38.79M | 199.04M | Net Debt |
| 118.39M | 17.53M | 8.20M | -80.45M | -74.23M | 73.65M | Total Liabilities |
| 214.79M | 179.84M | 156.67M | 136.96M | 180.00M | 341.84M | Stockholders Equity |
| 364.07M | 398.16M | 384.62M | 360.51M | 266.38M | 387.12M |
| Cash Flow | Free Cash Flow | ||||
| -16.38M | 15.79M | -73.17M | 113.56M | 292.65M | 80.22M | Operating Cash Flow |
| -4.43M | 106.74M | 16.73M | 137.81M | 315.33M | 94.96M | Investing Cash Flow |
| -10.81M | -81.49M | -89.78M | -24.12M | -23.40M | -13.96M | Financing Cash Flow |
| -5.42M | -17.97M | 5.88M | -105.99M | -303.92M | 3.38M |
Smith & Wesson Brands Technical Analysis
Neutral
9.43
Price Trends
9.51
Negative
9.92
Negative
11.59
Negative
Market Momentum
-0.03
Negative
51.24
Neutral
47.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWBI, the sentiment is Neutral. The current price of 9.43 is above the 20-day moving average (MA) of 9.37, below the 50-day MA of 9.51, and below the 200-day MA of 11.59, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 51.24 is Neutral, neither overbought nor oversold. The STOCH value of 47.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWBI.
Smith & Wesson Brands Risk Analysis
Smith & Wesson Brands disclosed 33 risk factors in its most recent earnings report. Smith & Wesson Brands reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Smith & Wesson Brands Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Performance Comparison
SWBI
Smith & Wesson Brands
9.43
-6.10
-39.28%
RGR
Sturm Ruger & Company
35.00
-7.26
-17.18%
POWW
AMMO
1.99
-0.43
-17.77%
Smith & Wesson Brands Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q3-2025)
| % Change Since: -13.25%|
Next Earnings Date:Jun 19, 2025
Earnings Call Sentiment Neutral
Smith & Wesson displayed strong new product performance and effective inventory management, but faced significant challenges with overall revenue decline and lower margins. The sentiment is balanced between positive innovation and negative financial outcomes.Q3-2025 Updates
Positive Updates
Strong New Product Performance
New products introduced within the past year accounted for over 41% of sales in the quarter, indicating successful innovation and strong market reception.
Long Guns ASP Increase
Average Selling Prices (ASP) for long guns increased by 17.2% in Q3, driven by strong demand for higher-priced lever rifles.
Inventory Management Success
Channel inventory at distributors is very clean, currently at under nine weeks, ensuring a balanced supply chain.
Capital Return to Shareholders
Smith & Wesson returned more than $49 million to shareholders via stock repurchases and dividends over the past twelve months.
Negative Updates
Overall Revenue Decline
Net sales for the third quarter were $115.9 million, down 15.7% compared to the prior year, mainly due to lower demand for core products and persistent inflation.
Handgun ASP Decline
Average Selling Prices (ASP) for handguns declined by 7.8%, reflecting strong demand for lower-priced products like the Bodyguard 2.0.
Reduced Production Margins
Gross margin fell to 24.1%, down 4.6% from the previous year, due to lower production volumes and higher promotional costs.
Lower Full-Year Revenue Projection
The company expects full-year revenue to decrease by 5-10% from fiscal 2024 levels, with Q4 projected to be down 2-5% from the prior year.
Company Guidance
During the Smith & Wesson Brands, Inc. Third Quarter Fiscal 2025 Financial Results Conference Call, the company provided several key metrics and guidance for the upcoming quarters. The top-line revenue for the third quarter was reported at $115.9 million, representing a 15.7% decline from the previous year. Despite this, the company maintained its EPS and EBITDA expectations through lower operating expenses and a flexible manufacturing model. New products accounted for over 41% of sales in the quarter, with the Bodyguard 2.0 driving demand in the handgun category despite a 7.8% decline in handgun ASPs. Long gun ASPs increased by 17.2%, driven by demand for higher-priced lever rifles. Adjusted NICS was down 4.5%, indicating a decrease in consumer firearm demand, yet the company noted a 20% compounded annual growth rate in long gun unit sales over two years. Operating expenses were $23.8 million, reduced by $4.3 million from the prior year, and the company ended the quarter with net income of $1.7 million or $0.04 per share. Smith & Wesson expects full-year revenue to decline by 5-10% compared to fiscal 2024, with the fourth quarter projected to see a 2-5% reduction from the prior year. The company also highlighted a strong balance sheet, plans for additional share repurchases, and a $0.13 quarterly dividend.Smith & Wesson Brands Corporate Events
Executive/Board Changes
Smith & Wesson VP of Sales Announces Retirement
Neutral
May 2, 2025
Smith & Wesson Brands, Inc. announced that its Vice President of Sales, Susan J. Cupero, plans to retire in May 2025. An agreement was made to ensure her continued salary and benefits, including immediate vesting of certain stock units and a lump sum for Medicare coverage, impacting the company’s leadership transition.
Spark’s Take on SWBI Stock
According to Spark, TipRanks’ AI Analyst, SWBI is a Neutral.
Smith & Wesson Brands’ stock score is influenced by its strong balance sheet and attractive yield, offset by declining revenue and profitability, and cash flow challenges. The technical indicators show a bearish trend, although the valuation remains fair. The company’s focus on innovation and inventory management is a positive, but overall financial stability needs improvement to enhance investor confidence.
To see Spark’s full report on SWBI stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.