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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.

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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 Brands: Mixed Q1 Performance

Smith & Wesson Brands reported Q1 FY2026 sales of $85.1 million and EBITDA of $8 million. Net sales declined 3.7% YoY, with a gross margin of 25.9%, down 120 bps due to tariffs and production absorption. The company reported a net loss of $3.4 million or 8¢ per share, missing estimates of 2¢. New products accounted for 37.3% of sales, including the Shield X model.

Publication Date: Sep -07

📋 Highlights
  • Q1 FY2026 Sales & EBITDA:: $85.1M revenue, $8M EBITDA, with handgun shipments up 35% YoY vs. NICS -2.4%.
  • Product Performance:: New products drove 37.3% of sales; Shield X model received strong market reception.
  • ASP Trends:: Sequential ASPs down 6.1% (-4% handguns, -13% long guns) due to mix and pricing pressure.
  • Strategic Investments:: $4.3M capital spending and $21M cash reserves; opened Smith & Wesson Academy in Tennessee.
  • Q2 Outlook:: Sales growth expected over Q1, stable gross margin, and 20% higher operating expenses from profit sharing and academy costs.

Financial Performance

Capital spending was $4.3 million, with $21 million in cash and $95 million in borrowings. Dividends of $5.9 million were paid, and a $0.13 quarterly dividend was announced. For Q2, management expects sales growth over Q1, stable gross margins, 20% higher operating expenses, and a 33% tax rate.

Valuation Metrics

With a P/S Ratio of 0.82 and EV/EBITDA of 9.02, the stock appears reasonably valued. The Dividend Yield is 5.95%, indicating an attractive income opportunity. ROE and ROIC are 3.3% and 3.07%, respectively, suggesting room for improvement in capital efficiency.

Outlook and Strategy

The company is focused on innovation, investing in facilities, and expanding into suppressor/NFA markets ahead of January 2026 regulatory changes. Management expects to manage inventory levels effectively and maintain a disciplined approach to promotions, supporting ASPs and aiding inventory reductions without overextending.

3. NewsRoom

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

Dec -04

Source: seekingalpha.com

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

Dec -04

Source: newsfilecorp.com

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

Nov -30

Source: 247wallst.com

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

Nov -20

Source: newsfilecorp.com

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Gun Stocks Surged After Charlie Kirk's Killing: Here's Why

Sep -11

Source: forbes.com

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Wall Street Breakfast Podcast: Futures Edge Higher Ahead Of CPI Report

Sep -11

Source: seekingalpha.com

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Smith & Wesson Brands, Inc. (SWBI) Q1 2026 Earnings Call Transcript

Sep -04

Source: seekingalpha.com

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

Sep -04

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: 5.6/10

Value: 2.9

Growth: 2.8

Quality: 5.0

Yield: 8.0

Momentum: 7.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Innovative Solutions and Support

A-Score: 5.3/10

Value: 4.3

Growth: 7.7

Quality: 7.2

Yield: 1.0

Momentum: 9.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
AMMO

A-Score: 4.1/10

Value: 7.8

Growth: 2.3

Quality: 4.9

Yield: 0.0

Momentum: 7.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Smith & Wesson Brands

A-Score: 4.0/10

Value: 4.1

Growth: 1.9

Quality: 4.3

Yield: 7.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Redwire

A-Score: 3.8/10

Value: 8.0

Growth: 4.1

Quality: 3.4

Yield: 0.0

Momentum: 6.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
VSE

A-Score: 3.7/10

Value: 1.2

Growth: 2.4

Quality: 4.9

Yield: 0.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.96$

Current Price

10.96$

Potential

-0.00%

Expected Cash-Flows