Smith & Wesson Brands (SWBI) AI Stock Analysis

• Market Cap: $535.70M
• Dividend Yield: 5.1%
• Average Volume (3M): 598.95K
• Price to Earnings (P/E): 53.6
• Beta (1Y): 0.52
• 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: 1.17
• Enterprise Value/Revenue: 1.35
• Enterprise Value/Gross Profit: 5.20
• Enterprise Value/Ebitda: 12.08
• 1Y Price Target: $11.00
• Price Target Upside: -8.64% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.22
• Revenue Forecast (FY): $477.56M

• Rating: 64 Neutral
• Price Target: $12.50 ▲(3.82% Upside)
• Action: Reiterated Date: 12/09/25
• Date: Action: Reiterated 12/09/25

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

Improving Cash Generation

The company has materially improved free cash flow in the trailing period and shows a healthy operating cash flow to net income conversion. Better cash generation increases financial flexibility to fund R&D, new product launches, and working capital needs over the next several quarters without relying on external financing.

Conservative Balance Sheet

Low leverage and a stable equity ratio provide resilience in a cyclical industry. A conservative capital structure supports continued investment in product development and inventory management, and gives management flexibility to navigate demand swings or absorb short-term shocks without jeopardizing long-term operations.

Product Innovation Driving Sales

New products contributing ~40% of sales demonstrates an effective product pipeline and meaningful incremental demand. This diversification of offerings, together with rising average selling prices, supports durable revenue streams and pricing power, helping sustain margins and retail sell-through over multiple quarters.

Negative Factors

Declining Revenue Trend

A negative trailing revenue growth rate signals demand weakness or market share pressure. Persistent topline decline compresses scale economies, limits reinvestment capacity, and makes margin recovery harder; unless sales stabilise, profitability and cash generation gains may be difficult to sustain over the coming quarters.

Margin Pressure and Tariff Headwinds

Gross margin contraction and an explicit tariff-related cost hit create persistent cost pressure. With reduced production absorption and tariffs expected to increase in the back half of the fiscal year, sustaining margin improvements will require either higher pricing, structural cost cuts, or stronger volume recovery—none assured in the near term.

Reduced Return on Equity / Earnings Volatility

A materially lower ROE combined with steep EPS decline indicates weaker capital efficiency and volatile profitability. This diminishes the company’s ability to generate returns for shareholders and limits excess cash for buybacks or dividend support, raising medium-term execution risk if margins or revenue do not recover.

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 faces challenges with declining revenue and profitability margins, yet maintains operational efficiency. The balance sheet is strong with low leverage, but reduced return on equity indicates profitability concerns. Cash flow performance has improved, but historical volatility suggests the need for careful cash management. Overall, the company demonstrates resilience in a challenging environment.

Income Statement

Smith & Wesson Brands has experienced a decline in revenue growth, with a negative growth rate in the TTM period. The gross profit margin has decreased over time, indicating pressure on profitability. However, the company maintains positive net profit and EBIT margins, suggesting operational efficiency despite revenue challenges.

Balance Sheet

The company's debt-to-equity ratio remains low, indicating a conservative leverage position. Return on equity has decreased significantly from previous years, reflecting reduced profitability. The equity ratio remains stable, suggesting a solid capital structure.

Cash Flow

Smith & Wesson Brands shows a strong recovery in free cash flow growth in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. However, historical volatility in free cash flow highlights potential cash flow management challenges.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	466.39M	474.66M	535.83M	479.24M	864.13M	1.06B
Gross Profit	120.92M	127.18M	158.09M	154.54M	374.56M	448.98M
EBITDA	52.04M	55.71M	84.01M	81.10M	281.64M	350.32M
Net Income	9.90M	13.43M	39.61M	36.88M	194.49M	252.05M
Balance Sheet
Total Assets	548.58M	559.61M	577.43M	541.29M	497.48M	446.39M
Cash, Cash Equivalents and Short-Term Investments	27.32M	25.23M	60.84M	53.56M	120.73M	113.02M
Total Debt	123.58M	114.73M	77.80M	64.46M	40.28M	41.18M
Total Liabilities	185.39M	187.16M	177.51M	156.67M	136.96M	180.00M
Stockholders Equity	363.20M	372.45M	399.91M	384.62M	360.51M	266.38M
Cash Flow
Free Cash Flow	36.47M	-29.02M	15.79M	-73.17M	113.56M	292.65M
Operating Cash Flow	50.15M	-7.22M	106.74M	16.73M	137.81M	315.33M
Investing Cash Flow	-31.15M	-19.17M	-81.49M	-89.78M	-24.12M	-23.40M
Financing Cash Flow	-35.66M	-9.21M	-17.97M	5.88M	-105.99M	-303.92M

Smith & Wesson Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 12.04 is above the 20-day moving average (MA) of 11.74, above the 50-day MA of 11.00, and above the 200-day MA of 9.44, indicating a bullish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 64.82 is Neutral, neither overbought nor oversold. The STOCH value of 70.53 is Neutral, 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
BYRN	66 Neutral	$292.23M	31.99	16.13%	―	50.99%	612.36%
SWBI	64 Neutral	$535.70M	53.60	2.71%	5.10%	-9.08%	-71.62%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PKE	61 Neutral	$568.08M	60.95	8.11%	2.53%	7.63%	7.09%
RGR	60 Neutral	$605.08M	289.34	0.87%	1.92%	3.90%	-92.10%
POWW	57 Neutral	$241.61M	-3.93	―	―	-11.01%	-279.70%
VTSI	55 Neutral	$48.93M	-84.90	-1.26%	―	-23.87%	-109.71%