Smith & Wesson Brands (SWBI) AI Stock Analysis

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Smith & Wesson Brands

(NASDAQ:SWBI)

Select Model

Neutral 55 (OpenAI - 4o)

Rating:55Neutral

Price Target:

$9.00

▼(-4.46% Downside)

Smith & Wesson Brands faces significant financial challenges, with declining revenues and profitability. While the company shows strength in innovation and market share in handguns, the high P/E ratio and declining margins are concerns. The positive momentum in technical indicators and a strong dividend yield provide some support, but overall, the stock's outlook remains cautious.

Smith & Wesson Brands (SWBI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$418.59M

Dividend Yield5.52%

Average Volume (3M)1.01M

Price to Earnings (P/E)34.8

Beta (1Y)0.38

Revenue Growth-7.25%

EPS Growth-63.58%

CountryUS

Employees1,501

SectorIndustrials

Sector Strength72

IndustryAerospace & Defense

Share Statistics

EPS (TTM)-0.08

Shares Outstanding44,341,780

10 Day Avg. Volume1,647,742

30 Day Avg. Volume1,010,102

Financial Highlights & Ratios

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 Cap1.10

Enterprise Value/Revenue0.98

Enterprise Value/Gross Profit3.68

Enterprise Value/Ebitda8.35

Forecast

1Y Price Target

$11.00

Price Target Upside16.77% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

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 generates revenue primarily through the sale of firearms and ammunition. The company's core revenue streams include the sale of handguns, revolvers, rifles, and related accessories, as well as ammunition sales. Additionally, SWBI earns revenue from contracts with law enforcement agencies and government entities, which often require specialized firearms and equipment. The company also benefits from partnerships with distributors and retailers, expanding its market reach. Seasonal trends, such as increased sales during hunting seasons and following significant political events that drive demand for firearms, also contribute to its overall earnings.

Smith & Wesson Brands Key Performance Indicators (KPIs)

Any

Handguns Total Units Shipped by Channel

Handguns Total Units Shipped by Channel
Tracks the number of handguns shipped through various sales channels, indicating demand trends, channel performance, and potential shifts in consumer preferences.

Chart InsightsSmith & Wesson's shipments in the Sporting Goods channel show a volatile trend, with recent upticks not fully offsetting earlier declines. The Professional channel remains consistently low. Despite gaining market share in handguns, the earnings call highlights macroeconomic pressures and industry challenges, including reduced consumer demand and lower margins due to tariffs. The company is strategically managing production and inventory to maintain ASPs and balance sheet strength, but anticipates continued demand softness in fiscal 2026, impacting future shipment volumes.

Data provided by:

Main Street Data

Smith & Wesson Brands Earnings Call Summary

Earnings Call Date:Sep 04, 2025

(Q1-2026)

% Change Since: |

Next Earnings Date:Dec 04, 2025

Earnings Call Sentiment Neutral

The earnings call displayed a mix of positive and negative outcomes. While the company showed strength in innovation, market share, and inventory management, financial metrics like net sales, gross margin, and net earnings reflected challenges. The reopening of the Smith & Wesson Academy and strategic focus on new products were notable positives.

Q1-2026 Updates

Positive Updates

Strong Market Share in Handguns

Shipments into the sporting goods channel increased over 35% year on year, contrasting with a 2.4% decline in NICS.

Positive Reception of New Products

New products accounted for 37.3% of sales in the first quarter, with the Shield X receiving a favorable initial reception.

Reopening of Smith & Wesson Academy

The Smith & Wesson Academy has been reopened with state-of-the-art facilities, providing training for law enforcement and consumers.

Strong Inventory Position

Distributor inventory was down more than 13,000 units at the end of July compared to 2025, indicating strong demand.

Innovation Strategy

Continued investment in innovation, with a strong pipeline of new products and a focus on maintaining leadership position.

Negative Updates

Decline in Net Sales

Net sales for the first quarter were $85.1 million, 3.7% below the prior year comparable quarter.

Decrease in Long Gun ASPs

Long gun average selling prices declined 13% due to mix and lower overall volume.

Gross Margin Decline

Gross margin of 25.91% was 1.5% below the comparable quarter last year due to decreased absorption on lower production and tariffs.

Net Loss Reported

The quarter resulted in a $3.4 million net loss, or an 8¢ loss per share, impacted by lower revenue, margins, and higher interest expenses.

Company Guidance

During the Smith & Wesson Brands, Inc. First Quarter Fiscal 2026 Financial Results Conference Call, the company provided several key metrics and insights into its performance and expectations. The first quarter saw sales amounting to $85.1 million, with an EBITDA of $8 million, indicating robust demand for new products. Handgun shipments into the sporting goods channel increased by over 35% year-on-year, outperforming the adjusted NICS metric, which was down 2.4%. Meanwhile, long gun shipments were down 28.1% year-over-year compared to a 7.8% decrease in NICS. Average selling prices (ASPs) declined by 6.1% sequentially, with handgun ASPs down 4% and long guns down 13%. Notably, new products accounted for 37.3% of sales in the first quarter. The company also highlighted a healthy inventory position, with distributor inventory down by more than 13,000 units at the end of July compared with the previous year. Looking ahead, Smith & Wesson anticipates a normal seasonal environment with second-quarter sales expected to grow significantly over the first quarter but remain 3% to 5% below the same quarter in the previous fiscal year.

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

Neutral

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

Neutral

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

Negative

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	471.40M	474.66M	535.83M	479.24M	864.13M	1.06B
Gross Profit	125.11M	127.18M	158.09M	154.54M	374.56M	448.98M
EBITDA	55.07M	55.71M	84.01M	81.10M	251.65M	319.63M
Net Income	12.12M	13.43M	39.61M	36.88M	194.49M	252.05M
Balance Sheet
Total Assets	554.63M	559.61M	578.00M	541.29M	497.48M	446.39M
Cash, Cash Equivalents and Short-Term Investments	21.18M	25.23M	60.84M	53.56M	120.73M	113.02M
Total Debt	129.36M	114.73M	78.37M	61.75M	40.28M	38.79M
Total Liabilities	190.25M	187.16M	179.84M	156.67M	136.96M	180.00M
Stockholders Equity	364.38M	372.45M	398.16M	384.62M	360.51M	266.38M
Cash Flow
Free Cash Flow	2.24M	-29.02M	15.79M	-73.17M	113.56M	292.65M
Operating Cash Flow	15.48M	-7.22M	106.74M	16.73M	137.81M	315.33M
Investing Cash Flow	-21.97M	-19.17M	-81.49M	-89.78M	-24.12M	-23.40M
Financing Cash Flow	-11.06M	-9.21M	-17.97M	5.88M	-105.99M	-303.92M

Smith & Wesson Brands Technical Analysis

Technical Analysis Sentiment

Positive

Last Price9.42

Price Trends

50DMA

8.33

Positive

100DMA

8.85

Positive

200DMA

9.46

Negative

Market Momentum

MACD

0.33

Negative

RSI

72.09

Negative

STOCH

79.58

Neutral

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 9.42 is above the 20-day moving average (MA) of 8.60, above the 50-day MA of 8.33, and below the 200-day MA of 9.46, indicating a neutral trend. The MACD of 0.33 indicates Negative momentum. The RSI at 72.09 is Negative, neither overbought nor oversold. The STOCH value of 79.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKE	75 Outperform	377.86M	54.87	6.64%	2.63%	16.60%	6.58%
BYRN	70 Outperform	465.66M	33.01	23.53%	―	73.56%	0.00%
RGR	66 Neutral	633.87M	127.17	1.99%	1.76%	3.31%	-82.99%
VTSI	59 Neutral	60.28M	150.28	0.82%	―	-17.36%	-94.28%
SWBI	55 Neutral	$418.59M	34.82	3.27%	5.52%	-7.25%	-63.58%
POWW	49 Neutral	166.30M	-2.71	-58.93%	―	-11.01%	-279.70%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

* Industrials Sector Average

Performance Comparison

SWBI

Smith & Wesson Brands

9.42

-3.57

-27.48%

PKE

Park Electrochemical

19.03

6.31

49.61%

RGR

Sturm Ruger & Company

39.22

-2.38

-5.72%

VTSI

VirTra

5.35

-1.12

-17.31%

POWW

AMMO

1.42

-0.10

-6.58%

BYRN

Byrna Technologies

20.51

5.44

36.10%

Smith & Wesson Brands Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Smith & Wesson Amends Credit Agreement with TD Bank

Neutral

Aug 18, 2025

On August 15, 2025, Smith & Wesson Brands and its subsidiaries amended their credit agreement with TD Bank and other financial institutions. The First Amendment allows for specific exclusions in calculating financial ratios and includes changes to the minimum Consolidated Fixed Charge Coverage Ratio for certain periods in 2026, potentially impacting the company’s financial flexibility and stakeholder interests.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 06, 2025