Last Updated: 17 Sep 2024
Executive Summary
Smith & Wesson Brands Inc. (SWBI) is a firearms manufacturer with a market capitalization of $587.56 million. The company has been facing headwinds in recent quarters due to supply chain disruptions and increased competition, resulting in a decline in revenue and earnings. However, the company's strong brand recognition and loyal customer base provide a solid foundation for future growth.
Company Overview
Smith & Wesson Brands Inc. designs, manufactures, and sells a wide range of firearms, including handguns, rifles, and shotguns. The company's products are sold through a network of distributors and retailers in the United States and internationally. Smith & Wesson has a long history in the firearms industry, dating back to 1852, and is known for its high-quality products and strong brand recognition.
Fundamental Analysis
Revenue: Smith & Wesson's revenue has declined in recent quarters due to supply chain disruptions and increased competition. In the latest quarter, revenue fell by 0.227% year-over-year to $509.92 million.
Earnings: The company's earnings have also declined in recent quarters. In the latest quarter, diluted EPS fell by 1.047% year-over-year to $0.74.
Profitability: Smith & Wesson's profitability metrics have remained relatively stable. The company's gross profit margin is 6.74%, and its operating margin is 1.25%.
Valuation: Smith & Wesson's stock is currently trading at a trailing PE ratio of 17.7, which is in line with the industry average. The company's forward PE ratio is not available.
Technical Analysis
Trend: Smith & Wesson's stock price has been trending lower in recent months. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has support at $13.00 and resistance at $14.00.
Momentum: The stock's momentum is currently negative. The MACD indicator is below the signal line and the RSI indicator is below 50.
Short Term Outlook
In the short term, Smith & Wesson's stock price is likely to remain under pressure due to the company's recent earnings decline and the overall weakness in the firearms industry. The stock may test support at $13.00 in the coming weeks.
Long Term Outlook
In the long term, Smith & Wesson's stock price is likely to be driven by the company's ability to execute on its growth strategy and improve its profitability. The company's strong brand recognition and loyal customer base provide a solid foundation for future growth. However, the company faces significant competition from other firearms manufacturers, and the overall demand for firearms is likely to remain volatile.
Analyst Recommendations
Analysts are currently mixed on Smith & Wesson's stock. Three analysts have a buy rating on the stock, while none have a strong buy, hold, sell, or strong sell rating. The average analyst target price is $18.67, which represents a potential upside of 41.0% from the current price.
