One-glance verdict
Undervalued
$40.16 our estimate vs market $14.08
Wall Street consensus: $17.25 (-57.0% lower than our fair-value estimate)
65% below our estimate, below the bear case
Fundamentals snapshot
Smith & Wesson Brands, Inc.
SWBI · NMS · Industrials · Aerospace & Defense
Current price
$14.08
52-week range
$8.14 - $17.56
Market cap
$631.34M
Balance sheet
Watch
6.07x Adequate
Net debt $47.52M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 5.3% last year.
- Reward Returns 6.6% on equity, ahead of 60% of its peers.
- Risk Net debt grew 81.5% over 3 years.
- Risk Operating margin compressed from 10.1% to 1.2% over 3 years.
What this company does
Smith & Wesson Brands, Inc.
Smith & Wesson is one of the most recognized American gun makers, selling firearms like handguns and rifles to individual customers, hunters, and law enforcement agencies. The company's financial success is tied directly to the number of guns it sells, which can be unpredictable as sales often rise or fall based on political events and discussions around gun control. This makes its business different from companies that have more stable, recurring revenue (predictable income from ongoing subscriptions or contracts).
How the company got here
Founded in 1852 by Horace Smith and Daniel B. Wesson, the company initially focused on developing a repeating rifle. After an early version of the company was sold and eventually became Winchester Repeating Arms, Smith and Wesson reunited to create the modern company in 1856, just as a key patent on revolvers was expiring. Over the next century, it became famous for its revolvers, which were widely adopted by American police. In 2020, the company spun off its outdoor products and accessories business to focus purely on firearms, officially becoming Smith & Wesson Brands, Inc.
What it actually does
Smith & Wesson is a leading American manufacturer of firearms. It designs, produces, and sells a wide variety of handguns and long guns to gun owners, hunters, sport shooters, and law enforcement agencies. Beyond the firearms themselves, the company also makes related products like handcuffs and firearm suppressors (devices that reduce the sound of a gunshot). It also offers industrial services like forging and machining to other businesses.
Firearms
This is the company's only business segment and represents the vast majority of its sales. It includes two main product categories: handguns, such as pistols and revolvers, and long guns, like rifles. Handguns are the largest part of this business, making up most of the company's revenue. Customers for these products range from individuals buying for personal protection or sport to law enforcement agencies and the military.
What management is betting on now
The company's main focus is on creating a steady stream of new and innovative firearms to attract customers and gain a larger share of the market. Management is also investing in making its manufacturing more efficient, partly by moving its headquarters and a lot of its operations to a new facility in Tennessee. By focusing solely on its well-known Smith & Wesson brand, the company aims to strengthen its position in the firearms market and expand into related areas.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$-10.70M
FY2025 Q3
$-16.15M
FY2025 Q4
$33.54M
FY2026 Q1
$-12.40M
FY2026 Q2
$16.28M
FY2026 Q3
$16.82M
FY2026 Q4
$69.75M
FY2027 Q1
$-20.77M
Revenue
$112.59M
Net income
$2.59M
Diluted EPS
0.06
Operating cash flow
$-8.85M
Free cash flow
$-20.77M
Fetching…
Sources
Revenue
$178.39M
Net income
$16.22M
Diluted EPS
0.37
Operating cash flow
$74.58M
Free cash flow
$69.75M
Fetching…
Sources
Revenue
$135.71M
Net income
$3.75M
Diluted EPS
0.08
Operating cash flow
$20.46M
Free cash flow
$16.82M
Fetching…
Sources
Revenue
$124.67M
Net income
$1.92M
Diluted EPS
0.04
Operating cash flow
$27.27M
Free cash flow
$16.28M
Fetching…
Sources
Revenue
$85.08M
Net income
$-3.41M
Diluted EPS
-0.08
Operating cash flow
$-8.11M
Free cash flow
$-12.40M
Fetching…
Sources
Revenue
$140.76M
Net income
$9.73M
Diluted EPS
0.22
Operating cash flow
$40.83M
Free cash flow
$33.54M
Fetching…
Sources
Revenue
$115.89M
Net income
$1.66M
Diluted EPS
0.04
Operating cash flow
$-9.84M
Free cash flow
$-16.15M
Fetching…
Sources
Revenue
$129.68M
Net income
$4.13M
Diluted EPS
0.09
Operating cash flow
$-7.40M
Free cash flow
$-10.70M
Fetching…
Sources
Is it cheap or expensive?
Fair value $40.16 vs current price $14.08
Wall Street consensus is the average analyst price target: $17.25 (-57.0% lower than our fair-value estimate).
Our most-likely fair value is $40.16 a share — about 185.2% above today's price of $14.08, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $47.5M. Interest coverage 6.1x.
Net debt
$47.52M
Interest coverage
6.07x
Smith & Wesson Brands, Inc.'s profit covers its interest bill about 6.1 times over. which is stronger than every peer shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
SWBI
BASELINE
Smith & Wesson Brands, Inc.
Total debt $72.76M Interest coverage 6.07x This is the baseline the peer rows are being compared against.
Total debt $1.49M Interest coverage -128.85x -100% vs SWBI This peer has almost no interest-payment cushion compared with SWBI.
Total debt $10.88M Interest coverage -3.56x -100% vs SWBI This peer has almost no interest-payment cushion compared with SWBI.
Total debt $3.41B Interest coverage 0.21x -97% vs SWBI Carries about 29.5x less debt cushion than SWBI.
Total debt $4.95B Interest coverage 3.64x -40% vs SWBI Carries about 1.7x less debt cushion than SWBI.
What you should know
The case for and against SWBI
3 Rewards
3 Risks
Rewards
-
Revenue grew 5.3% last year.
-
Returns 6.6% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Net debt grew 81.5% over 3 years.
-
Operating margin compressed from 10.1% to 1.2% over 3 years.
-
Insider ownership is only 2.4% (peer median: 8.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
25.60x
Forward P/E
23.47x
P/B
1.69x
P/S
1.15x
EV/EBITDA
10.72x
PEG ratio
0.84x
Profitability
How much profit each dollar creates
Gross margin
26.9%
Operating margin
1.2%
Net margin
4.4%
ROE
6.6%
ROA
3.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.19x
Current ratio
3.62x
Quick ratio
0.85x
Total debt
$72.76M
Total cash
$25.23M
Growth
How the business has been compounding
Revenue TTM
$551.36M
Revenue 5Y CAGR
-11.8%
EPS TTM
0.55
EPS 5Y CAGR
-20.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$113.46M
Free CF TTM
$90.45M
FCF margin
16.4%
Dividend
Shareholder payout
Yield
3.7%
Payout ratio
94.5%
Last ex-div date
2026-09-17