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Smith & Wesson (SWHC) Q1 Earnings: A Beat in the Cards?
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Smith & Wesson Holding Corporation is scheduled to report first-quarter fiscal 2017 results, after market close on Sep 1. The gun maker has an impressive earnings history, having beaten estimates in all of the last four quarters at an average of 34.14%. Let’s see how things are shaping up for this quarter.
Our proven model conclusively shows that Smith & Wesson is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: The Earnings ESP for the company is +1.89% as the Most Accurate estimate stands at 54 cents while the Zacks Consensus Estimate is lower at 53 cents.
Zacks Rank: Smith & Wesson’s Zacks Rank #1, when combined with positive ESP, makes an earnings beat likely this quarter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
What’s Driving the Better-Than-Expected Result?
Smith & Wesson is a leading firearm manufacturer and designer, boasting a broad portfolio of quality firearms, related products and training to the global military, law enforcement and consumer markets. The company’s online retail segment sells firearm accessories, branded products, apparel and related shooting supplies.
The FBI's National Instant Criminal Background Check System (“NICS”) showed a 31.6% year-over-year uptick in permit applications in the three-month period between May 2016 and Jul 2016. Though one cannot draw a one-to-one co-relation between the NICS report and the number of firearms sold, any upward or downward movement in firearm background checks is likely to have a proportional impact on firearm sales.
Notably, background checks crushed all-time records in Jun 2016, highlighting a 39% jump year over year and a 14% increase sequentially. Again, Jul 2016 marked the 15th consecutive month of record background checks for gun sales.
For the first quarter, Smith & Wesson expects revenues in the range of $190 million to $200 million, with the midpoint representing a 31.8% improvement over the year-ago quarter figure of $148 million. Non-GAAP earnings per share are expected in the 49–53 cents band, up 59.4% at the midpoint from 32 cents earned in the prior-year quarter.
President Obama’s stand on stricter firearm regulations led to a sudden increase in gun and ammunition sales in the recent past. The rush could definitely bolster sales for the gun manufacturers, Smith & Wesson and Sturm, Ruger & Company (RGR - Free Report) . Other stocks that could be impacted by the FBI data release are Cabela's Inc. and Vista Outdoor Inc. (VSTO - Free Report) . Again, Smith & Wesson is on the growth path, maintaining healthy financials.
The Zacks Consensus Estimate for Smith & Wesson’s first-quarter earnings is pegged at 53 cents a share, reflecting 66.3% growth year over year.
Peer Release
Sturm, Ruger & Company’s second-quarter 2016 earnings came in at $1.22 per share, up 34% from 91 cents recorded in the year-ago quarter. The upside can be mainly attributable to higher sales.
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Smith & Wesson (SWHC) Q1 Earnings: A Beat in the Cards?
Smith & Wesson Holding Corporation is scheduled to report first-quarter fiscal 2017 results, after market close on Sep 1. The gun maker has an impressive earnings history, having beaten estimates in all of the last four quarters at an average of 34.14%. Let’s see how things are shaping up for this quarter.
SMITH & WESSON Price and EPS Surprise
SMITH & WESSON Price and EPS Surprise | SMITH & WESSON Quote
Earnings Whispers
Our proven model conclusively shows that Smith & Wesson is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: The Earnings ESP for the company is +1.89% as the Most Accurate estimate stands at 54 cents while the Zacks Consensus Estimate is lower at 53 cents.
Zacks Rank: Smith & Wesson’s Zacks Rank #1, when combined with positive ESP, makes an earnings beat likely this quarter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
What’s Driving the Better-Than-Expected Result?
Smith & Wesson is a leading firearm manufacturer and designer, boasting a broad portfolio of quality firearms, related products and training to the global military, law enforcement and consumer markets. The company’s online retail segment sells firearm accessories, branded products, apparel and related shooting supplies.
The FBI's National Instant Criminal Background Check System (“NICS”) showed a 31.6% year-over-year uptick in permit applications in the three-month period between May 2016 and Jul 2016. Though one cannot draw a one-to-one co-relation between the NICS report and the number of firearms sold, any upward or downward movement in firearm background checks is likely to have a proportional impact on firearm sales.
Notably, background checks crushed all-time records in Jun 2016, highlighting a 39% jump year over year and a 14% increase sequentially. Again, Jul 2016 marked the 15th consecutive month of record background checks for gun sales.
For the first quarter, Smith & Wesson expects revenues in the range of $190 million to $200 million, with the midpoint representing a 31.8% improvement over the year-ago quarter figure of $148 million. Non-GAAP earnings per share are expected in the 49–53 cents band, up 59.4% at the midpoint from 32 cents earned in the prior-year quarter.
President Obama’s stand on stricter firearm regulations led to a sudden increase in gun and ammunition sales in the recent past. The rush could definitely bolster sales for the gun manufacturers, Smith & Wesson and Sturm, Ruger & Company (RGR - Free Report) . Other stocks that could be impacted by the FBI data release are Cabela's Inc. and Vista Outdoor Inc. (VSTO - Free Report) . Again, Smith & Wesson is on the growth path, maintaining healthy financials.
The Zacks Consensus Estimate for Smith & Wesson’s first-quarter earnings is pegged at 53 cents a share, reflecting 66.3% growth year over year.
Peer Release
Sturm, Ruger & Company’s second-quarter 2016 earnings came in at $1.22 per share, up 34% from 91 cents recorded in the year-ago quarter. The upside can be mainly attributable to higher sales.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>