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Smith & Wesson (SWBI) Stock Sinks As Market Gains: What You Should Know

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Smith & Wesson (SWBI - Free Report) closed at $22.60 in the latest trading session, marking a -1.57% move from the prior day. This change lagged the S&P 500's 0.17% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.4%.

Coming into today, shares of the firearm maker had gained 3.52% in the past month. In that same time, the Consumer Discretionary sector lost 2.34%, while the S&P 500 gained 3.19%.

Investors will be hoping for strength from Smith & Wesson as it approaches its next earnings release, which is expected to be December 2, 2021. On that day, Smith & Wesson is projected to report earnings of $1.37 per share, which would represent year-over-year growth of 47.31%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $277.9 million, up 11.73% from the year-ago period.

SWBI's full-year Zacks Consensus Estimates are calling for earnings of $5.05 per share and revenue of $924.3 million. These results would represent year-over-year changes of +11.23% and -16.52%, respectively.

It is also important to note the recent changes to analyst estimates for Smith & Wesson. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Smith & Wesson currently has a Zacks Rank of #3 (Hold).

Investors should also note Smith & Wesson's current valuation metrics, including its Forward P/E ratio of 4.55. For comparison, its industry has an average Forward P/E of 11.45, which means Smith & Wesson 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 59, which puts it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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