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what it is
Smith & Wesson makes and sells firearms, with handguns driving most of your exposure.
how it gets paid
Last year Smith & Wesson made $475M in revenue. Handguns was the main engine at $333M, or 70% of sales.
why growth slowed
Revenue fell 11.4% last year. The figure represented a decline of roughly 4% vs. prior year.
what just happened
Smith & Wesson posted EPS of $0.04 versus a $0.03 estimate, but the bigger story is that profits are still thin.
At a glance
B balance sheet — gets the job done, barely
35/100 earnings predictability — expect surprises
42.1x trailing p/e — you're paying up for this one
5.7% dividend yield — cash in your pocket every quarter
9.0% return on capital — nothing to write home about
xvary composite: 50/100 — below average
What they do
Smith & Wesson makes and sells firearms, with handguns driving most of your exposure.
This is a brand business wearing a factory uniform. Handguns were 70% of fiscal 2024 sales, or about $333 million of the $475 million total, which tells you buyers still walk in asking for the name. Brand equity (people trust the label) → repeat demand and shelf space → so what: that helps Smith & Wesson hold volume even when the firearm market is described as merely stable.
How they make money
$475M
annual revenue · their business grew -11.4% last year
Handguns
$333M
Long guns
$105M
Other
$38M
The products that matter
manufactures and sells pistols and revolvers
Handguns
$285M · 60% of displayed segment revenue
it's the core business at $285M, and the average selling price was $418, up 2.1% from a year ago. If this category stalls, the whole story stalls with it.
core segment
manufactures and sells rifles and shotguns
Long Guns
$142.5M · 30% of displayed segment revenue
this $142.5M segment carries a $602 average selling price and grew 10.2% from a year ago. That's the faster-growing part of the lineup, even if it is still half the size of handguns.
faster growth
sells accessories and other products
Other & Accessories
$47.5M · 10% of displayed segment revenue
it's the smallest bucket at $47.5M. That matters because there is not much diversification cushion if the core firearm categories soften.
small buffer
Key numbers
42.1x
trailing p/e
P/E → how many dollars you pay for $1 of profit → so what: you are paying a growth-stock multiple for a company with shrinking sales.
5.7%
dividend yield
Dividend yield → cash paid to shareholders each year as a share of the stock price → so what: you are getting paid while you wait, but that payout needs earnings support.
9.0%
return on capital
Return on capital → profit generated from the money tied up in the business → so what: 9.0% is decent, not elite, especially against a 42.1x multiple.
$122M
long-term debt
Long-term debt → money the company owes for years → so what: it equals 20% of capital, which is manageable but still limits flexibility in a downturn.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- long-term debt $122M (20% of capital)
- net profit margin 7.3% — keeps 7 cents of every dollar in revenue
- return on equity 10% — $0.10 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SWBI 3 years ago → it's now worth $11,920.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Smith & Wesson posted EPS of $0.04 versus a $0.03 estimate, but the bigger story is that profits are still thin.
Latest-quarter revenue was about $135.7 million, up roughly 17% vs. prior year per the company report, while gross margin improved to 26.2% from 24.1%. That said, annual revenue still landed at $475 million, down 11.4%, so one decent quarter does not erase a weak year.
$135.7M
revenue
$0.04
eps
26.2%
gross margin
gross margin
Gross margin at 26.2% mattered because margin expansion, not explosive sales growth, did most of the work in the quarter.
-
indeed, sales of $124.7 million nearly matched our estimate.
-
the figure represented a decline of roughly 4% vs. prior year.
-
the market for firearms continues to remain relatively stable.
-
smith & wesson was able to lower dealer inventory, however.
-
meanwhile, earnings of $0.04 per share topped our call by a penny, but were well below the prior-year period.
source: company earnings report, 2026
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What could go wrong
the #1 risk is consumer firearm demand softening while regulation and litigation stay elevated.
high
Demand reversal in handguns
Handguns represent $285M of the displayed segment mix. If consumer demand cools, the biggest revenue bucket takes the hit first.
exposes roughly 60% of the displayed segment revenue
high
Regulatory and litigation pressure
This is a branded firearms business. State restrictions, liability actions, or tighter distribution rules can pressure sales and sentiment at the same time.
can affect the entire revenue base, not just one product line
med
Margin relapse
Q3 gross margin improved to 26.2%, but trailing net margin is still only 2.6%. That gap tells you fixed costs and operating leverage still matter a lot.
even small cost pressure can erase a big share of earnings
Handguns and long guns account for $427.5M of the $475M segment breakout shown here. In other words, most of the business is still one consumer category with regulatory baggage attached.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
q4 fiscal 2026 earnings report
expected late may 2026. You want to see whether the Q3 margin improvement holds.
metric
gross margin
26.2% was the bright spot. If it slips back while revenue stays modest, the rebound case weakens fast.
trend
monthly background check data
NICS data is not perfect, but it is one of the clearest real-time demand reads for the category.
risk
institutional selling and capital return
76 buyers versus 97 sellers tells you big money was not leaning in. Watch whether buybacks and the 4.9% yield keep doing the heavy lifting.
Analyst rankings
risk profile
average
stability score 3 means this sits near the middle of the pack on balance-sheet and price-risk measures. In human-speak: not a bunker stock, not chaos either.
earnings predictability
35 / 100
35 / 100 means earnings are hard to model with confidence. You're buying a story that can swing a lot from quarter to quarter.
source: institutional data
Institutional activity
76 buyers vs. 97 sellers in 3q2025. total institutional holdings: 23.2M shares.
source: institutional data
Price targets
3-5 year target range
$4
$13
$11
current price
$8
target midpoint · 24% from current · 3-5yr high: $14 (+35% · 10% ann'l return)
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