Smith & Wesson Brands (SWBI) AI Stock Analysis

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Smith & Wesson Brands

(NASDAQ:SWBI)

Rating:62Neutral

Price Target:

$8.50

▲(5.33% Upside)

Smith & Wesson Brands faces significant financial and market challenges, reflected in declining revenue and profitability. While the company shows strength in innovation and market share gains, these are offset by bearish technical indicators and economic headwinds. The stock's moderate valuation and high dividend yield provide some support, but overall, the outlook remains cautious.

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

Market Cap

$357.74M

Dividend Yield6.44%

Average Volume (3M)771.45K

Price to Earnings (P/E)27.5

Beta (1Y)0.34

Revenue Growth-11.73%

EPS Growth-64.84%

CountryUS

Employees1,501

SectorIndustrials

Sector Strength79

IndustryAerospace & Defense

Share Statistics

EPS (TTM)0.19

Shares Outstanding44,111,460

10 Day Avg. Volume678,733

30 Day Avg. Volume771,451

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.44

Enterprise Value/Revenue1.08

Enterprise Value/Gross Profit4.04

Enterprise Value/Ebitda9.22

Forecast

1Y Price Target

$9.50

Price Target Upside17.72% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Smith & Wesson Brands Business Overview & Revenue Model

Company DescriptionSmith & Wesson Brands, Inc. (SWBI) is a leading American manufacturer of firearms and ammunition, primarily known for its handguns, rifles, and related accessories. The company operates in the firearms sector and offers a diverse range of products under well-established brands, including Smith & Wesson, Thompson/Center Arms, and others. With a strong focus on innovation, quality, and reliability, SWBI serves both the consumer and law enforcement markets, providing products that cater to personal protection, sport shooting, and hunting.

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:Jun 18, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Sep 04, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with notable strengths in new product sales and market share gains in handguns, balanced by significant challenges including revenue decline, reduced gross margin, and economic headwinds.

Q4-2025 Updates

Positive Updates

Strong New Product Sales

New products accounted for 44% of sales in the fourth quarter, highlighting the company's focus on innovation and competitive differentiation.

Market Share Gains in Handguns

Despite a 5.4% decline in adjusted NICS for the quarter, Smith & Wesson gained market share in handguns with a smaller decline in shipments compared to the market.

Balance Sheet Strength

The company maintains a strong balance sheet with disciplined capital allocation, focusing on debt reduction and continued dividend payments.

Effective Cost Management

The company leveraged a flexible manufacturing model to partially offset bottom line impacts from lower sales and production volumes.

Cash Flow Generation

Generated $40.8 million in cash from operations during the quarter, despite challenging market conditions.

Negative Updates

Revenue Decline

Net sales for the fourth quarter were $140.8 million, a decrease of 11.6% compared to the prior year.

Gross Margin Reduction

Gross margin fell to 28.8%, down 6.7 percentage points from the prior year, due to lower production volume and increased promotions.

Net Income Drop

Net income for the fourth quarter was $8.6 million, a $18.7 million decrease from the prior year.

Lower Average Selling Prices

Average selling prices were down 4.5% year-over-year, with a significant decline in handgun prices.

Economic Headwinds

Persistent inflation, high interest rates, and tariff concerns negatively impacted firearm market conditions.

Company Guidance

During the fourth quarter of fiscal 2025, Smith & Wesson Brands, Inc. faced challenges due to macroeconomic and industry trends, resulting in an 11.6% decrease in net sales to $140.8 million compared to the prior year. Despite these headwinds, new products accounted for 44% of sales, showcasing the company's innovation efforts. The firearms market saw a 5.4% decline in overall adjusted NICS, with handguns experiencing a 3.4% drop versus a 2.1% decline in Smith & Wesson's shipments, suggesting a gain in market share. In contrast, long guns faced a more significant decline with NICS down 7.1% and shipments decreasing by 31.7%. The company's average selling prices (ASPs) decreased by 4.5% year-over-year, affected by a mix shift towards lower-priced handguns and higher-priced long guns. Operating expenses declined by $2.1 million to $27.4 million, while net income fell by $18.7 million to $8.6 million. The company remains committed to cost control, innovation, and maintaining market share, with a focus on reducing debt and managing inventory levels strategically.

Smith & Wesson Brands Financial Statement Overview

Summary

Smith & Wesson Brands faces financial headwinds with declining revenue and profitability. The company's revenue dropped significantly from $1.06 billion in 2021 to $474.66 million in 2025. Decreased profit margins and negative free cash flow, driven by high capital expenditures, highlight the need for improved cash management.

Income Statement

Positive

Smith & Wesson Brands has seen a notable decline in revenue and profitability in recent years, with revenue dropping from $1.06 billion in 2021 to $474.66 million in 2025. Gross and net profit margins also decreased, indicating pressure on profitability. The company needs to address these challenges to improve its financial performance.

Balance Sheet

Positive

The company's balance sheet shows a solid equity base, with a debt-to-equity ratio consistently below 0.31, indicating manageable leverage. However, the decline in stockholders' equity and assets could signal potential risks. Maintaining this balance is crucial for financial stability.

Cash Flow

Neutral

The cash flow situation is concerning, as the company reported negative free cash flow in the most recent year, driven by high capital expenditures and declining operating cash flow. This trend highlights the need for efficient cash management and cost optimization.

Breakdown	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 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	251.65M	319.63M
Net Income	13.43M	39.61M	36.88M	194.49M	252.05M
Balance Sheet
Total Assets	559.61M	578.00M	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	78.37M	61.75M	40.28M	38.79M
Total Liabilities	187.16M	179.84M	156.67M	136.96M	180.00M
Stockholders Equity	372.45M	398.16M	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

Negative

Last Price8.07

Price Trends

50DMA

8.30

Negative

100DMA

8.87

Negative

200DMA

9.71

Negative

Market Momentum

MACD

-0.05

Negative

RSI

46.51

Neutral

STOCH

67.25

Neutral

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 8.07 is above the 20-day moving average (MA) of 8.06, below the 50-day MA of 8.30, and below the 200-day MA of 9.71, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 46.51 is Neutral, neither overbought nor oversold. The STOCH value of 67.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKE	75 Outperform	$381.83M	55.45	6.43%	2.64%	16.60%	6.58%
BYRN	68 Neutral	$451.35M	32.64	28.05%	―	73.56%	―
Sector *	64 Neutral	$10.96B	16.35	8.89%	1.96%	2.68%	-15.17%
SWBI	62 Neutral	$357.74M	27.51	3.48%	6.44%	-11.73%	-64.84%
VTSI	60 Neutral	$65.43M	167.13	0.83%	―	-17.36%	-94.28%
RGR	59 Neutral	$566.80M	113.42	1.88%	2.00%	3.31%	-82.99%
POWW	51 Neutral	$172.15M	―	-17.71%	―	-11.01%	-279.70%

* Industrials Sector Average

Performance Comparison

SWBI

Smith & Wesson Brands

8.07

-6.18

-43.37%

PKE

Park Electrochemical

18.95

5.89

45.10%

RGR

Sturm Ruger & Company

34.54

-6.77

-16.39%

VTSI

VirTra

6.06

-0.58

-8.73%

POWW

AMMO

1.44

-0.15

-9.43%

BYRN

Byrna Technologies

19.70

8.22

71.60%

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: Aug 29, 2025