Smith & Wesson Brands (SWBI) AI Stock Analysis

• Market Cap: $386.38M
• Dividend Yield: 5.96%
• Average Volume (3M): 760.60K
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.26
• Revenue Growth: -11.73%
• EPS Growth: -64.84%
• Country: US
• Employees: 1,501
• Sector: Industrials
• Sector Strength: 83
• Industry: Aerospace & Defense
• EPS (TTM): 0.20
• Shares Outstanding: 44,309,940
• 10 Day Avg. Volume: 1,654,118
• 30 Day Avg. Volume: 760,603
• PEG Ratio: -0.73
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -23.44
• Enterprise Value/Market Cap: 1.30
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 3.44
• Enterprise Value/Ebitda: 1.64
• 1Y Price Target: $10.00
• Price Target Upside: 15.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 54 Neutral
• Price Target: $9.00 ▲(3.93%Upside)

Smith & Wesson's overall stock score is primarily impacted by financial performance challenges, with significant revenue and profitability declines. Technical analysis also indicates bearish momentum. While product innovation and a strong dividend yield provide some positive aspects, the macroeconomic pressures and overvaluation concerns weigh heavily on the stock's outlook.

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 Brands, Inc. generates revenue primarily through the design, manufacture, and sale of firearms. The company's revenue streams are significantly driven by its diverse product offerings, which include handguns, long guns, and other related accessories. Sales are made through a network of distributors and retailers, both domestically and internationally. The company also benefits from contracts with law enforcement and military agencies, which are significant contributors to its income. Additionally, Smith & Wesson has established partnerships and licensing agreements that allow it to expand its brand presence and leverage its reputation in the firearms industry.

Smith & Wesson Brands Financial Statement Overview

Summary

Smith & Wesson Brands has a robust balance sheet with zero debt and strong equity, but faces challenges with declining revenues and profitability. Recent cash flow issues highlight the need for improved cash management despite past positive performances. The financial performance is stable but shows areas needing improvement.

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.

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.

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.

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
EBITDA	65.86M	84.01M	81.10M	251.65M	319.63M	81.59M
Net Income	29.80M	39.61M	36.88M	194.49M	252.05M	-61.23M
Balance Sheet
Total Assets	578.86M	578.00M	541.29M	497.48M	446.39M	728.96M
Cash, Cash Equivalents and Short-Term Investments	26.70M	60.84M	53.56M	120.73M	113.02M	125.40M
Total Debt	145.10M	78.37M	61.75M	40.28M	38.79M	199.04M
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

• Technical Analysis Sentiment: Negative
• Last Price: 8.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWBI, the sentiment is Negative. The current price of 8.66 is below the 20-day moving average (MA) of 9.72, below the 50-day MA of 9.59, and below the 200-day MA of 10.81, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 35.32 is Neutral, neither overbought nor oversold. The STOCH value of 9.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SWBI.

Smith & Wesson Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$10.56B	15.49	5.57%	1.96%	2.71%	-26.29%
RGR	64 Neutral	$588.53M	19.42	9.56%	1.99%	0.65%	-20.28%
SWBI	54 Neutral	$386.38M	28.75	3.48%	5.96%	-11.73%	-64.84%
POWW	43 Neutral	$150.69M	―	-17.71%	―	-11.01%	-279.70%

Smith & Wesson Brands Corporate Events

Smith & Wesson VP of Sales Announces Retirement

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.