Why Smith & Wesson Stock Is Aimed Higher After Earnings

Smith & Wesson Brands, Inc. SWBI shares are trading higher Friday after the company posted better-than-expected third-quarter financial results Thursday after the bell.

The Details:

Smith & Wesson reported quarterly earnings of 19 cents per share which beat the analyst consensus estimate of 10 cents.

Quarterly sales clocked in at $137.5 million which beat the analyst consensus estimate of $133.548 million and is a 6.56% increase year-over-year. 

"We believe we gained market share as our shipments outpaced the overall firearm market, reflecting the continuing robust demand for our best-in-class, innovative new products and sustained momentum in our core product portfolio," said Smith & Wesson CEO Mark Smith.

The company also announced a 12 cent per share quarterly dividend, which will be paid to stockholders of record on March 21 with payment to be made on April 4.

Lake Street analyst Mark Smith maintained a Buy rating on the stock and raised the price target from $14.50 to $16 following the print.

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SWBI Stock Prediction 2024:

When buying a stock for a longer time horizon, it is important for investors to assess where they think the stock is headed in the future.

When mapping a stock's future trajectory, investors should consider factors including the future earnings expectations and expected performance against a benchmark.

Smith & Wesson Brands's revenue has grown at an average rate of 3.81% annually over the past 5 years. The average 1-year price target from analysts is $16, representing an expected -6.76% downside in 2025.

While past performance is not a guarantee of future results, investors should also look at a stock's historical performance when compared to both a benchmark index and the company's peers. Shares of Smith & Wesson Brands have seen an annualized return of -4.31%, underperforming the S&P500 index by 14.82%. This compares to 5.67% growth in the overall Consumer Discretionary sector. Smith & Wesson Brands has a beta of 0.12.

SWBI Price Action: According to Benzinga Pro, Smith & Wesson shares are up 28.6% at $17.28 at the time of publication.

Image: Gerd Altmann from Pixabay