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Smith & Wesson (SWBI) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Smith & Wesson (SWBI - Free Report) closed at $18.06, marking a -1.9% move from the previous day. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow gained 0.2%, and the Nasdaq, a tech-heavy index, lost 0.25%.

Prior to today's trading, shares of the firearm maker had lost 10.32% over the past month. This has lagged the Consumer Discretionary sector's gain of 3.07% and the S&P 500's gain of 2.37% in that time.

SWBI will be looking to display strength as it nears its next earnings release. On that day, SWBI is projected to report earnings of $0.82 per share, which would represent year-over-year growth of 530.77%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $264.70 million, up 58.79% from the year-ago period.

SWBI's full-year Zacks Consensus Estimates are calling for earnings of $3.27 per share and revenue of $961.20 million. These results would represent year-over-year changes of +298.78% and +41.69%, respectively.

Investors might also notice recent changes to analyst estimates for SWBI. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SWBI is currently a Zacks Rank #4 (Sell).

Investors should also note SWBI's current valuation metrics, including its Forward P/E ratio of 5.47. For comparison, its industry has an average Forward P/E of 16.29, which means SWBI is trading at a discount to the group.

The Leisure and Recreation Products industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 28, which puts it in the top 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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