Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on SWBI

Here is a 90-word analysis of the negative drivers behind Smith & Wesson Brands, Inc.'s recent stock performance: Disappointing Q2 earnings, driven by inflation and softening demand, have weighed on Smith & Wesson Brands' stock. The company's fiscal Q2 2025 results missed estimates, with revenue of $129.7 million and EPS of $0.09/share, sparking a 20% drop in shares. Inflationary pressures and decreased demand have negatively impacted the company's top and bottom lines. Additionally, the inconsistency in gun control legislation under Trump adds uncertainty, further pressuring the stock.

1.c. Company Highlights

2. Smith & Wesson's Q2 FY2026 Earnings: Mixed Results

Smith & Wesson Brands, Inc. reported its second-quarter fiscal 2026 financial results, with net sales of $124.7 million, down 3.9% from the prior year. The company's gross margin was 24.3%, down 2.3% from the prior year due to decreased absorption on temporarily lower production and an 80-basis-point negative impact from tariffs. Earnings per share were 4 cents, compared with 10 cents in the prior year period, missing analyst estimates of 5 cents. Operating expenses were $26.2 million, down $733,000 from the prior year, indicating some control over costs. The company's EBITDA was $15 million, and operating cash flow was $27.3 million, demonstrating its ability to generate cash.

Publication Date: Dec -07

📋 Highlights
  • Net Sales Decline:: Q2 net sales fell to $124.7 million, down 3.9% YoY.
  • EBITDA and Cash Flow:: EBITDA was $15 million, with operating cash flow at $27.3 million.
  • Inventory Reduction:: Inventory dropped $20 million to $183 million, maintaining 8 weeks of supply.
  • New Product Contribution:: New products accounted for nearly 40% of Q2 sales.
  • Q3 Guidance:: Sales expected 8–10% higher than Q3 2025, with gross margins improving sequentially and YoY.

Inventory Management and Product Mix

The company ended the quarter with $183 million in inventory, down from $203 million at the end of Q1, indicating a reduction in inventory levels. New products accounted for nearly 40% of sales in the quarter, driving growth in a competitive environment. Handgun unit shipments into the sporting goods channel were down 1.9% versus the market, but after adjusting for channel inventory fluctuations, handgun sell-through at the retail counter was up 7.7%. The company is very positive about Smith & Wesson's performance, citing market share gains and a strong brand, with the CEO stating that the portfolio is doing extremely well, with inventory levels at a healthy eight weeks of supply.

Outlook and Valuation

For the third quarter, the company expects sales to be 8% to 10% over Q3 fiscal 2025 sales, with gross margins expected to increase by a few percentage points both sequentially and year over year. With a current P/E Ratio of 49.13 and an EV/EBITDA of 10.5, the stock appears to be priced for growth. The Dividend Yield is 4.74%, providing some support to the stock price. Analysts estimate next year's revenue growth at -4.0%, which may put pressure on the stock. However, the company's strong brand and market share gains could help it weather a decline in the market.

Balance Sheet and Cash Flow

The company's balance sheet remains strong, with $27.3 million in cash and investments and $90 million in borrowings on its line of credit, which has been reduced by $15 million since the end of Q2. The company expects continued healthy cash generation through the second half of the fiscal year, with an effective tax rate of approximately 28%. The board has authorized a quarterly dividend to be paid to stockholders of record on December 18, with payment to be made on January 2, maintaining the company's commitment to returning capital to shareholders.

3. NewsRoom

Card image cap

Smith & Wesson Brands (NASDAQ:SWBI) Shares Down 0.6% – Time to Sell?

Jan -21

Source: defenseworld.net

Card image cap

ATC Venture Group (OTCMKTS:ATCV) and Smith & Wesson Brands (NASDAQ:SWBI) Head to Head Analysis

Dec -24

Source: defenseworld.net

Card image cap

Analyzing Academy Sports and Outdoors (NASDAQ:ASO) and Smith & Wesson Brands (NASDAQ:SWBI)

Dec -23

Source: defenseworld.net

Card image cap

Smith & Wesson: A Soft 'Buy' After A Sharp Rally

Dec -06

Source: seekingalpha.com

Card image cap

Smith & Wesson Brands, Inc. (SWBI) Q2 2026 Earnings Call Transcript

Dec -04

Source: seekingalpha.com

Card image cap

Smith & Wesson Brands, Inc. Reports Second Quarter Fiscal 2026 Financial Results

Dec -04

Source: newsfilecorp.com

Card image cap

America’s Most Loved Pistol Brands and Why They Stand Out

Nov -30

Source: 247wallst.com

Card image cap

Smith & Wesson Brands, Inc. Second Quarter Fiscal 2026 Financial Release and Conference Call Alert

Nov -20

Source: newsfilecorp.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.83%)

6. Segments

Handguns

Expected Growth: 3.8%

Strong demand for personal protection and recreational shooting, driven by increasing concerns about safety and self-defense, particularly among women and minorities. Additionally, the growing popularity of competitive shooting sports and the need for law enforcement agencies to upgrade their firearms have contributed to the 3.8% growth of Smith & Wesson's handgun segment.

Long Guns

Expected Growth: 4.2%

Strong demand for outdoor recreation and self-defense, coupled with increased firearm sales among first-time buyers, drive the 4.2% growth of Long Guns from Smith & Wesson Brands, Inc. Additionally, the company's strategic product innovation, expanded distribution channels, and effective marketing campaigns contribute to the segment's growth.

Other Products and Services

Expected Growth: 3.5%

The 3.5% growth in Other Products and Services from Smith & Wesson Brands, Inc. is driven by increasing demand for outdoor recreation and camping gear, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation and product diversification, such as its electro-optics and suppressor lines, contributes to the segment's growth.

7. Detailed Products

M&P Pistols

Smith & Wesson's M&P pistols are designed for personal, sporting, and professional use, offering a range of calibers and features.

SDVE Pistols

Smith & Wesson's SDVE pistols are designed for self-defense and concealed carry, offering a lightweight and compact design.

Rifles

Smith & Wesson's rifles are designed for hunting, target shooting, and tactical applications, offering a range of calibers and configurations.

Shotguns

Smith & Wesson's shotguns are designed for hunting, sport shooting, and home defense, offering a range of gauges and configurations.

Performance Center Firearms

Smith & Wesson's Performance Center firearms are designed for competitive shooting and hunting, offering high-performance features and customization options.

Thompson/Center Arms Muzzleloaders

Thompson/Center Arms muzzleloaders are designed for hunting and recreational shooting, offering a range of calibers and configurations.

GEMTECH Suppressors

GEMTECH suppressors are designed for firearms, reducing noise and recoil, and offering a range of models for different calibers and applications.

Hooyman Outdoors Tree Saws

Hooyman Outdoors tree saws are designed for outdoor enthusiasts, offering a range of models for hunting, camping, and outdoor activities.

8. Smith & Wesson Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Smith & Wesson Brands, Inc. is medium due to the presence of alternative products in the market, such as archery equipment and air guns. However, the company's strong brand reputation and product quality help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Smith & Wesson Brands, Inc. due to the company's strong brand reputation and the lack of switching costs for customers. Additionally, the company's products are often considered niche products, which reduces the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Smith & Wesson Brands, Inc. due to the company's dependence on a few key suppliers for raw materials and components. However, the company's strong relationships with its suppliers and its ability to negotiate prices help to mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for Smith & Wesson Brands, Inc. due to the high barriers to entry in the firearms industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high in the firearms industry, with several established players competing for market share. Smith & Wesson Brands, Inc. faces intense competition from companies such as Sturm, Ruger & Co., Inc. and Vista Outdoor Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 14.35%
Debt Cost 3.95%
Equity Weight 85.65%
Equity Cost 9.43%
WACC 8.65%
Leverage 16.76%

11. Quality Control: Smith & Wesson Brands, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sturm Ruger

A-Score: 4.2/10

Value: 4.2

Growth: 2.8

Quality: 5.0

Yield: 6.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
AMMO

A-Score: 4.2/10

Value: 7.8

Growth: 2.3

Quality: 3.2

Yield: 0.0

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Innovative Solutions and Support

A-Score: 4.1/10

Value: 2.7

Growth: 6.3

Quality: 7.2

Yield: 0.0

Momentum: 7.0

Volatility: 1.3

1-Year Total Return ->

View Full Report
Stock-Card
Smith & Wesson Brands

A-Score: 4.1/10

Value: 5.4

Growth: 1.9

Quality: 4.3

Yield: 7.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
VSE

A-Score: 3.9/10

Value: 1.3

Growth: 2.9

Quality: 5.2

Yield: 0.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Redwire

A-Score: 3.1/10

Value: 8.2

Growth: 4.0

Quality: 4.0

Yield: 0.0

Momentum: 1.5

Volatility: 0.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.71$

Current Price

11.71$

Potential

-0.00%

Expected Cash-Flows