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Category: Smith & Wesson (SWBI)
Date: 21 June 2021 Stock price of Smith & Wesson (SWBI): $23.35 Market Capital of Smith & Wesson: $1.24 billion We take a look at the 4th quarter 2021 earnings report of Smith & Wesson, a US based firearms manufacturer. For the quarter the group reported net sales of $322.9 million and net income of $89 million which amounts to $1.70 earnings per share.
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Mark Smith, President and Chief Executive Officer - The results of the past year, in spite of the unthinkable challenges that we faced as a nation and as a company, are a tremendous testament to the resolve of our dedicated employees, the power of the Smith & Wesson brand, and the strength of the partnerships we have with our customers. "
More About Smith & Wesson
Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson®, M&P®, and Gemtech® brands. The company also provides manufacturing services including forging, machining, and precision plastic injection molding services
Overview of Smith & Wesson 4th quarter 2021 earnings
Fourth Quarter Fiscal 2021 Financial Highlights
- Quarterly net sales were $322.9 million compared with $193.0 million for the comparable quarter last year, an increase of 67.3%.
- Gross margin for the quarter was 45.1% compared with 32.2% for the comparable quarter last year.
- Quarterly GAAP net income was a record $89.2 million, or $1.70 per diluted share, compared with $20.9 million, or $0.38 per diluted share, for the comparable quarter last year.
- Quarterly non-GAAP net income was $89.6 million, or $1.71 per diluted share, compared with $27.5 million, or $0.50 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the spin-off of the outdoor products and accessories business, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.
- Quarterly non-GAAP Adjusted EBITDAS was $125.6 million, or 38.9% of net sales, compared with $51.6 million, or 26.7% of net sales, for the comparable quarter last year.
Smith & Wesson management commentary on their 4th quarter 2021 earnings
SPRINGFIELD, Mass., June 17, 2021 /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 fourth quarter and full fiscal year 2021, ended April 30, 2021. On August 24, 2020, the company completed the previously announced spin-off of its outdoor products and accessories business
Mark Smith, President and Chief Executive Officer, commented, "The results of the past year, in spite of the unthinkable challenges that we faced as a nation and as a company, are a tremendous testament to the resolve of our dedicated employees, the power of the Smith & Wesson brand, and the strength of the partnerships we have with our customers. Our employees more than doubled the prior year sales, passed a milestone of $1 billion in revenue, and by every financial and operating metric, have delivered the most successful year in the 169 year history of the company. But most importantly, we have set a rock solid foundation for the long term success of the company, with astounding market share growth. During the past fiscal year, the US firearms market experienced record growth of 42%, meanwhile shipments from Smith & Wesson far surpassed the industry, growing by 70%. Strong consumer preference for our products combined with our ability to rapidly react to the increased demand has placed us in a clear leadership position as we enter into our first full fiscal year as a standalone pure-play firearms company."
Mark Smith, President and Chief Executive Officer, commented, "The results of the past year, in spite of the unthinkable challenges that we faced as a nation and as a company, are a tremendous testament to the resolve of our dedicated employees, the power of the Smith & Wesson brand, and the strength of the partnerships we have with our customers. Our employees more than doubled the prior year sales, passed a milestone of $1 billion in revenue, and by every financial and operating metric, have delivered the most successful year in the 169 year history of the company. But most importantly, we have set a rock solid foundation for the long term success of the company, with astounding market share growth. During the past fiscal year, the US firearms market experienced record growth of 42%, meanwhile shipments from Smith & Wesson far surpassed the industry, growing by 70%. Strong consumer preference for our products combined with our ability to rapidly react to the increased demand has placed us in a clear leadership position as we enter into our first full fiscal year as a standalone pure-play firearms company."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "The hard work and dedication of all of our employees, combined with record-breaking demand for our high-quality products drove equally record-breaking financial results for the year, including record revenue, net income, earnings per share, and cash generation. We began our first year as a pure-play firearm company with clear strategic priorities, and we have delivered on our strategy. During fiscal 2021, we invested in our business and our people, we repaid all of our bank debt, we repurchased over 10% of our outstanding common stock, and we began paying our stockholders a quarterly dividend for the first time in company history. Continuing with our capital allocation strategy, I am pleased to announce that our Board has authorized a new $50 million share repurchase program as well as a 60% increase in our quarterly dividend to 8 cents per share. This quarter's dividend will be paid to stockholders of record on July 1st with payment to be made on July 6th."
Smith & Wesson (SWBI) stock chart over the last 5 years
The image below shows the stock price history of Smith & Wesson over the last 5 years. And its been a very average time for Smith & Wesson stockholders with the stock increasing by only 6.9% over the last 5 years.
The stock of Smith & Wesson is trading at closer to its 52 week high than it is to its 52 week low which 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 closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Smith & Wesson stock is positive at this point in time.
Latest stock valuation of Smith & Wesson
So what is Smith & Wesson stock worth based on their 4th quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Smith & Wesson at $28.30 a stock.
We therefore believe the stock of Smith & Wesson is undervalued at its current price of $23.35
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $28.30, thus a good entry point into Smith & Wesson would be at $25.50 or below.
We expect the stock of Smith & Wesson to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued
We therefore believe the stock of Smith & Wesson is undervalued at its current price of $23.35
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $28.30, thus a good entry point into Smith & Wesson would be at $25.50 or below.
We expect the stock of Smith & Wesson to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued
Next earnings release of Smith & Wesson
It is expected that Smith & Wesson will release their 1st quarter 2022 earnings report in late September 2021
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