According to Fortune, gun sales grew 40% year-over-year in June. It was just last month that the most deadly shooting in US history took place. In the aftermath, people fear for their own safety and attempt to ensure their own security by purchasing firearms. Sales were very high in 2015, and this year looks like there may be an even higher demand for guns, given the record pace of background checks conducted by the FBI so far in 2016.
As gun legislation talks pick up momentum, more and more people are flocking towards buying arms while they freely can. Gun manufacturers stand to win big from this trend, but not all of them are worth investing in. Thankfully, the Zacks Rank helps with finding promising investments over the short term. Smith & Wesson looks like a superior investment candidate amongst its industry peers right now, so buying SWHC stock now could pay off over the short term.
Smith & Wesson is one of the world’s leading producers of handguns, firearm safety, and security products. The company looks like a solid investment choice right now because of sound fundamental metrics and positive earnings sentiment backing it up.
Value
Smith & Wesson trades at a reasonable price-to-earnings multiple of just 14.62. One other attractive value trait for the stock is its EV/EBITDA of 7.65. The average EV/EBITDA for the industry is 8.98, so it is nice to see that SWHC trends on the lower side of this metric. The company is not very leveraged, and its debt-to-capital of just 35.11% is proof of this. Smith & Wesson has a current ratio of 2.72, so it looks pretty liquid over the short term. It’s no wonder why this company gets a “B” for value in our Style Scores.
Growth
While SWHC is already large, it has potential to grow even more. The company’s earnings are forecasted to increase this year, and it also enjoys better profitability margins than its industry. Smith & Wesson has a trailing twelve month net margin of 13%, and the industry’s net margin lags behind at just 5.61%. Sales are forecasted to grow by 4.61% this year.
Earnings
Over the last 30 days, three analysts have revised their earnings estimates for this quarter. All of those analysts have revised their estimates upwards, and our EPS consensus for this quarter has trended upwards over the last month, going from $0.37 to $0.54. Our current year earnings consensus estimate has moved up over the last month as well, and it has gone from $1.73 to $1.90. SWHC has done well in beating our EPS estimates by double digit percentages over each of the last four quarters. Smith & Wesson is expected to release its next quarterly earnings report in late August.
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As Sales Surge 40%, Buy Smith & Wesson (SWHC) Stock
According to Fortune, gun sales grew 40% year-over-year in June. It was just last month that the most deadly shooting in US history took place. In the aftermath, people fear for their own safety and attempt to ensure their own security by purchasing firearms. Sales were very high in 2015, and this year looks like there may be an even higher demand for guns, given the record pace of background checks conducted by the FBI so far in 2016.
As gun legislation talks pick up momentum, more and more people are flocking towards buying arms while they freely can. Gun manufacturers stand to win big from this trend, but not all of them are worth investing in. Thankfully, the Zacks Rank helps with finding promising investments over the short term. Smith & Wesson looks like a superior investment candidate amongst its industry peers right now, so buying SWHC stock now could pay off over the short term.
Smith & Wesson is one of the world’s leading producers of handguns, firearm safety, and security products. The company looks like a solid investment choice right now because of sound fundamental metrics and positive earnings sentiment backing it up.
Value
Smith & Wesson trades at a reasonable price-to-earnings multiple of just 14.62. One other attractive value trait for the stock is its EV/EBITDA of 7.65. The average EV/EBITDA for the industry is 8.98, so it is nice to see that SWHC trends on the lower side of this metric. The company is not very leveraged, and its debt-to-capital of just 35.11% is proof of this. Smith & Wesson has a current ratio of 2.72, so it looks pretty liquid over the short term. It’s no wonder why this company gets a “B” for value in our Style Scores.
Growth
While SWHC is already large, it has potential to grow even more. The company’s earnings are forecasted to increase this year, and it also enjoys better profitability margins than its industry. Smith & Wesson has a trailing twelve month net margin of 13%, and the industry’s net margin lags behind at just 5.61%. Sales are forecasted to grow by 4.61% this year.
Earnings
Over the last 30 days, three analysts have revised their earnings estimates for this quarter. All of those analysts have revised their estimates upwards, and our EPS consensus for this quarter has trended upwards over the last month, going from $0.37 to $0.54. Our current year earnings consensus estimate has moved up over the last month as well, and it has gone from $1.73 to $1.90. SWHC has done well in beating our EPS estimates by double digit percentages over each of the last four quarters. Smith & Wesson is expected to release its next quarterly earnings report in late August.
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