Smith & Wesson Brands, Inc. (SWBI) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA above its 5-year median

Smith & Wesson Brands's EV/EBITDA of 10.3 is above its 5-year median of 6.6.

P/B below the industry

Smith & Wesson Brands's price-to-book of 1.90 is below the Fabricated Metal Products, except Machinery and Transportation Equipment median of 2.69.

Trading above fair value

The share price of $15.83 is above our fair value estimate of $14.31.

Margin of safety under 20%

The price is 10.6% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -20.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 106% over the last twelve months, against a 5-year average of -40.7% a year.

Growing faster than the industry

Revenue grew 17.0% over the last twelve months; the Fabricated Metal Products, except Machinery and Transportation Equipment median is 10.2%.

Guidance issued

The latest outlook (second quarter anticipated sales, Sep 3, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 27.4% over the last twelve months, against 26.5% a year earlier.

Return on equity under 15%

Return on equity was 6.6% over the last twelve months and averaged 18.2% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.7%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Smith & Wesson Brands's return on equity of 6.6% is below the Fabricated Metal Products, except Machinery and Transportation Equipment median of 9.0%.

Earnings shrank over 5 years

Net income shrank 40.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.4% over the last twelve months, against a 5-year average of 8.9%.

Net margin below the industry

Smith & Wesson Brands's net margin of 4.4% is below the Fabricated Metal Products, except Machinery and Transportation Equipment median of 4.5%.

No debt

Smith & Wesson Brands has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 3.62 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.53; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Smith & Wesson Brands paid dividends worth 3.3% of the share price over the last twelve months.

Yield below Treasuries

The 3.3% yield is below the 4.6% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.9% or more; Smith & Wesson Brands yields 3.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Not covered by earnings

Dividends take 95.3% of net income, leaving little room.

Covered by free cash flow

Dividends take 28.4% of free cash flow.