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Category: Stock Market and Smith & Wesson
Date: 5 September 2020 Stock Price of Smith & Wesson: $18.16 We take a look at the 1st quarter earnings for their 2021 fiscal year of Smith & Wesson (SWBI) formerly known as American Outdoor Brands. During the 1st quarter of their 2021 fiscal year the group's net sales topped $277 million and the group reported net earnings of $48.3 million
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- Today, I am pleased to report record-breaking first quarter financial results for Smith & Wesson Brands, Inc. These results could not have been possible without our dedicated employees, who not only worked diligently to manufacture and fulfill the strong flow of customer orders with a broad assortment of our highly sought-after firearms"
About Smith & Wesson
Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a provider of quality products for shooting, hunting, and rugged outdoor enthusiasts in the global consumer and professional markets. The Company reports two segments: Firearms and Outdoor Products & Accessories. Firearms manufactures handgun, long gun, and suppressor products sold under the iconic Smith & Wesson®, M&P®, Thompson/Center Arms™, and Gemtech® brands, as well as provides forging, machining, and precision plastic injection molding services. Outdoor Products & Accessories is an industry leading provider of shooting, reloading, gunsmithing and gun cleaning supplies, specialty tools and cutlery, and electro-optics products and technology for firearms. This segment produces innovative, top quality products under the brands Caldwell®; Crimson Trace®; Wheeler®; Tipton®; Frankford Arsenal®; Lockdown®; BOG®; Hooyman®; Smith & Wesson® Accessories; M&P® Accessories; Thompson/Center Arms™ Accessories; Performance Center® Accessories; Schrade®; Old Timer®; Uncle Henry®; Imperial®; BUBBA®; UST®; and LaserLyte®
Overview of Smith & Wesson's 1st quarter 2021 earnings report
The data below refers to the latest quarter unless specified otherwise
- Net sales: $277.96 million (up from $123.625 million from the same quarter of the previous year)
- Net sales increased by 124.8% over the last 12 months
- Cost of sales : $161.199 million (up from $75.811 million for the same quarter of the previous year)
- Cost of sales increased by 112.6% over the last 12 months
- Net earnings: $48.3 million (up from -$2.1 million for the same quarter of the previous year)
- Diluted earnings per share: $0.86 (down from -$0.04 for the same quarter of the previous year)
- PE ratio of Smith & Wesson: 5.3
- Diluted weighted-average shares outstanding: 56.277 million (down from 54.7 million for the same quarter of the previous year)
- Cash and cash equivalents: $101.358 million
- Cash and cash equivalents per share: $1.80
- Cash and cash equivalents makes up 9.9% of Smith & Wesson's current market capital
- Cash and cash equivalents makes up 15.4% of Smith & Wesson's total assets
- Inventories: $149.567 million
- Inventories makes up 22.7% of Smith & Wesson's total assets
- Total stockholders' equity of Smith & Wesson: $437.065 million
- Stockholders' equity per share: $7.76
- So Smith & Wesson (SWBI) is trading at 2.34 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
- The average price to book value of firms in the S&P 500 is 3.7
Management commentary on their 1st quarter 2021 earnings
SPRINGFIELD, Mass., Sept. 3, 2020 /PRNewswire/ -- Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the first quarter fiscal 2021, ended July 31, 2020. The financial results for the period are reported in two segments: Firearms and Outdoor Products & Accessories. On August 24, 2020, the company announced that it had completed the previously announced spin-off of its Outdoor Products & Accessories segment. Therefore, first quarter fiscal 2021 represents the final period in which the Smith & Wesson Brands, Inc. financial results will include the financial results of the Outdoor Products & Accessories segment
Mark Smith, President and Chief Executive Officer, commented, "Today, I am pleased to report record-breaking first quarter financial results for Smith & Wesson Brands, Inc. These results could not have been possible without our dedicated employees, who not only worked diligently to manufacture and fulfill the strong flow of customer orders with a broad assortment of our highly sought-after firearms, but did so with a heightened commitment to the health and safety protocols that our operations management team put in place at the start of the pandemic. Our record revenue and unit sales during the quarter demonstrates our ability to rapidly respond to increased demand through our flexible manufacturing model and our state-of-the-art distribution facility, delivering outstanding products that resonate with the firearms consumer."
Mark Smith, President and Chief Executive Officer, commented, "Today, I am pleased to report record-breaking first quarter financial results for Smith & Wesson Brands, Inc. These results could not have been possible without our dedicated employees, who not only worked diligently to manufacture and fulfill the strong flow of customer orders with a broad assortment of our highly sought-after firearms, but did so with a heightened commitment to the health and safety protocols that our operations management team put in place at the start of the pandemic. Our record revenue and unit sales during the quarter demonstrates our ability to rapidly respond to increased demand through our flexible manufacturing model and our state-of-the-art distribution facility, delivering outstanding products that resonate with the firearms consumer."
Smith continued, "With the successful spin-off of our Outdoor Products & Accessories segment last week, we have now returned to our heritage as a pure-play firearms company, with a focus on organic growth and returning excess capital to our stockholders. As such, our Board of Directors has authorized the company to declare a regular, quarterly cash dividend of $0.05 per share. Our first quarterly dividend will be payable on October 1, 2020 to shareholders of record as of the market close on September 17, 2020."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "Our strong financial performance enabled us to generate operating cash flow of $83.5 million during the quarter, which, combined with our cash on hand, allowed us to pay down $135.0 million on our revolving line of credit and end the quarter with zero net debt. After the end of the first quarter, as part of the spin-off process, we restructured our credit facility for a new, five-year term that enables us to maintain an unsecured $100 million line of credit for the foreseeable future."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "Our strong financial performance enabled us to generate operating cash flow of $83.5 million during the quarter, which, combined with our cash on hand, allowed us to pay down $135.0 million on our revolving line of credit and end the quarter with zero net debt. After the end of the first quarter, as part of the spin-off process, we restructured our credit facility for a new, five-year term that enables us to maintain an unsecured $100 million line of credit for the foreseeable future."
Smith & Wesson (SWBI) stock price history
The image below, obtained from Google shows Smith & Wesson (SWBI) stock price since their listing in August 2016. And its been a decent time for Smith & Wesson stockholders. 5 years ago the stock was trading at $14.40 and its currently trading at $18.16. That's a return of 26.1% provided to Smith & Wesson stockholders over the last 5 years.
The stock of Smith & Wesson is trading at a lot closer to its 52 week high of $27.79 than it is to its 52 week low of $5.41, which to us is a clear indication that the short term sentiment and momentum of Smith & Wesson stock is positive at this point in time.
The stock of Smith & Wesson is trading at a lot closer to its 52 week high of $27.79 than it is to its 52 week low of $5.41, which to us is a clear indication that the short term sentiment and momentum of Smith & Wesson stock is positive at this point in time.
Recent coverage of Smith & Wesson (SWBI)
The extract below covers the latest from Smith & Wesson (SWBI) as obtained from Finance.Yahoo.com
Smith & Wesson (SWBI) came out with quarterly earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 73.21%. A quarter ago, it was expected that this firearm maker would post earnings of $0.48 per share when it actually produced earnings of $0.57, delivering a surprise of 18.75%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Smith & Wesson, which belongs to the Zacks Leisure and Recreation Products industry, posted revenues of $277.97 million for the quarter ended July 2020, surpassing the Zacks Consensus Estimate by 18.64%. This compares to year-ago revenues of $123.67 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Smith & Wesson shares have added about 124% since the beginning of the year versus the S&P 500's gain of 10.8%.
What's Next for Smith & Wesson?
While Smith & Wesson has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Read the full article here
Smith & Wesson (SWBI) came out with quarterly earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 73.21%. A quarter ago, it was expected that this firearm maker would post earnings of $0.48 per share when it actually produced earnings of $0.57, delivering a surprise of 18.75%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Smith & Wesson, which belongs to the Zacks Leisure and Recreation Products industry, posted revenues of $277.97 million for the quarter ended July 2020, surpassing the Zacks Consensus Estimate by 18.64%. This compares to year-ago revenues of $123.67 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Smith & Wesson shares have added about 124% since the beginning of the year versus the S&P 500's gain of 10.8%.
What's Next for Smith & Wesson?
While Smith & Wesson has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Read the full article here
Smith &Wesson (SWBI) latest stock valuation
So what is Smith & Wesson (SWBI) stock worth considering their latest earnings release? Based on their 4th quarter earnings release our valuation models set a target price (full value price) for Smith & Wesson of $21.70 a stock. We therefore believe Smith & Wesson stock is undervalued.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $21.70, a good entry point into the stock of Smith & Wesson would therefore be at $19.60 or below.
We expect that the stock of Smith & Wesson will kick upwards from its current price to levels closer to our target price/ full value price in coming weeks and months. Since the stock of Smith & Wesson is trading at well below our suggested entry point we rate the stock of Smith & Wesson (SWBI) as a buy.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $21.70, a good entry point into the stock of Smith & Wesson would therefore be at $19.60 or below.
We expect that the stock of Smith & Wesson will kick upwards from its current price to levels closer to our target price/ full value price in coming weeks and months. Since the stock of Smith & Wesson is trading at well below our suggested entry point we rate the stock of Smith & Wesson (SWBI) as a buy.
Next earnings release of Smith & Wesson (SWBI)
It is expected that Smith & Wesson (SWBI) will release their 2nd quarter 2021 earnings report in middle December 2020