SMITH & WESSON BRANDS INC (SWBI) Stock Fundamental Analysis
NASDAQ:SWBI - Nasdaq - US8317541063 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to SWBI. SWBI was compared to 30 industry peers in the Leisure Products industry. SWBI scores excellent on profitability, but there are some minor concerns on its financial health. SWBI does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
In the past year SWBI was profitable.
In the past year SWBI has reported a negative cash flow from operations.
SWBI had positive earnings in 4 of the past 5 years.
SWBI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of SWBI (5.15%) is better than 73.33% of its industry peers.
SWBI's Return On Equity of 8.19% is fine compared to the rest of the industry. SWBI outperforms 73.33% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.49%, SWBI is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SWBI is significantly above the industry average of 8.00%.
The 3 year average ROIC (22.14%) for SWBI is well above the current ROIC(5.49%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.15% | ||
| ROE | 8.19% | ||
| ROIC | 5.49% |
ROA(3y)17.59%
ROA(5y)20.17%
ROE(3y)24.5%
ROE(5y)30.46%
ROIC(3y)22.14%
ROIC(5y)30.61%
1.3 Margins
The Profit Margin of SWBI (6.04%) is better than 80.00% of its industry peers.
In the last couple of years the Profit Margin of SWBI has grown nicely.
SWBI's Operating Margin of 7.33% is fine compared to the rest of the industry. SWBI outperforms 80.00% of its industry peers.
In the last couple of years the Operating Margin of SWBI has remained more or less at the same level.
SWBI has a Gross Margin of 29.80%. This is comparable to the rest of the industry: SWBI outperforms 50.00% of its industry peers.
SWBI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.33% | ||
| PM (TTM) | 6.04% | ||
| GM | 29.8% |
OM growth 3Y-32.15%
OM growth 5Y1.37%
PM growth 3Y-32.27%
PM growth 5Y14.1%
GM growth 3Y-10.98%
GM growth 5Y-0.33%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), SWBI is creating value.
The number of shares outstanding for SWBI has been reduced compared to 1 year ago.
Compared to 5 years ago, SWBI has less shares outstanding
The debt/assets ratio for SWBI is higher compared to a year ago.
2.2 Solvency
SWBI has an Altman-Z score of 4.13. This indicates that SWBI is financially healthy and has little risk of bankruptcy at the moment.
SWBI has a Altman-Z score of 4.13. This is in the better half of the industry: SWBI outperforms 73.33% of its industry peers.
A Debt/Equity ratio of 0.39 indicates that SWBI is not too dependend on debt financing.
SWBI has a Debt to Equity ratio of 0.39. This is in the lower half of the industry: SWBI underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.13 |
ROIC/WACC0.61
WACC8.96%
2.3 Liquidity
SWBI has a Current Ratio of 4.67. This indicates that SWBI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.67, SWBI belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
SWBI has a Quick Ratio of 1.56. This is a normal value and indicates that SWBI is financially healthy and should not expect problems in meeting its short term obligations.
SWBI has a better Quick ratio (1.56) than 63.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.67 | ||
| Quick Ratio | 1.56 |
3. Growth
3.1 Past
SWBI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.18%.
The Earnings Per Share has been decreasing by -0.49% on average over the past years.
SWBI shows a decrease in Revenue. In the last year, the revenue decreased by -5.45%.
SWBI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.17% yearly.
EPS 1Y (TTM)-18.18%
EPS 3Y-44.47%
EPS 5Y-0.49%
EPS Q2Q%-88.24%
Revenue 1Y (TTM)-5.45%
Revenue growth 3Y-20.32%
Revenue growth 5Y2.17%
Sales Q2Q%-15.71%
3.2 Future
Based on estimates for the next years, SWBI will show a very negative growth in Earnings Per Share. The EPS will decrease by -24.31% on average per year.
SWBI is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.70% yearly.
EPS Next Y-58.44%
EPS Next 2Y-24.31%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-8.84%
Revenue Next 2Y-2.7%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.46, the valuation of SWBI can be described as rather expensive.
Based on the Price/Earnings ratio, SWBI is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
SWBI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.31.
A Price/Forward Earnings ratio of 22.65 indicates a rather expensive valuation of SWBI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SWBI is on the same level as its industry peers.
SWBI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.46 | ||
| Fwd PE | 22.65 |
4.2 Price Multiples
SWBI's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SWBI is cheaper than 76.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.62 |
4.3 Compensation for Growth
The decent profitability rating of SWBI may justify a higher PE ratio.
A cheap valuation may be justified as SWBI's earnings are expected to decrease with -24.31% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-24.31%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.36%, SWBI is a good candidate for dividend investing.
SWBI's Dividend Yield is rather good when compared to the industry average which is at 4.39. SWBI pays more dividend than 90.00% of the companies in the same industry.
SWBI's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.36% |
5.2 History
SWBI has been paying a dividend for over 5 years, so it has already some track record.
SWBI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
76.64% of the earnings are spent on dividend by SWBI. This is not a sustainable payout ratio.
DP76.64%
EPS Next 2Y-24.31%
EPS Next 3YN/A
10.51
-0.18 (-1.68%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryLeisure Products
Earnings (Last)
Earnings (Next)
Inst Owners55.54%
Inst Owner Change-1.99%
Ins Owners1.32%
Ins Owner Change11.55%
Market Cap462.44M
Analysts80
Price Target14.11 (34.25%)
Short Float %5.42%
Short Ratio5.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.36% |
Yearly Dividend0.48
Dividend Growth(5Y)N/A
DP76.64%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-18.3%
Min EPS beat(2)-34.64%
Max EPS beat(2)-1.96%
EPS beat(4)2
Avg EPS beat(4)-2.66%
Min EPS beat(4)-34.64%
Max EPS beat(4)23.99%
EPS beat(8)6
Avg EPS beat(8)12.8%
EPS beat(12)8
Avg EPS beat(12)0.86%
EPS beat(16)10
Avg EPS beat(16)3.66%
Revenue beat(2)0
Avg Revenue beat(2)-5.78%
Min Revenue beat(2)-6.66%
Max Revenue beat(2)-4.9%
Revenue beat(4)0
Avg Revenue beat(4)-6.89%
Min Revenue beat(4)-15.53%
Max Revenue beat(4)-0.49%
Revenue beat(8)3
Avg Revenue beat(8)-1.78%
Revenue beat(12)4
Avg Revenue beat(12)-5.76%
Revenue beat(16)5
Avg Revenue beat(16)-4.85%
PT rev (1m)0%
PT rev (3m)-9.78%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-23.33%
EPS NY rev (1m)0%
EPS NY rev (3m)-17.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.85%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.46 | ||
| Fwd PE | 22.65 | ||
| P/S | 0.94 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.27 | ||
| P/tB | 1.35 | ||
| EV/EBITDA | 8.62 |
EPS(TTM)0.54
EY5.14%
EPS(NY)0.46
Fwd EY4.42%
FCF(TTM)-0.56
FCFYN/A
OCF(TTM)-0.1
OCFYN/A
SpS11.21
BVpS8.27
TBVpS7.79
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.15% | ||
| ROE | 8.19% | ||
| ROCE | 7.02% | ||
| ROIC | 5.49% | ||
| ROICexc | 5.79% | ||
| ROICexgc | 6.06% | ||
| OM | 7.33% | ||
| PM (TTM) | 6.04% | ||
| GM | 29.8% | ||
| FCFM | N/A |
ROA(3y)17.59%
ROA(5y)20.17%
ROE(3y)24.5%
ROE(5y)30.46%
ROIC(3y)22.14%
ROIC(5y)30.61%
ROICexc(3y)29.72%
ROICexc(5y)44.21%
ROICexgc(3y)32.06%
ROICexgc(5y)48.84%
ROCE(3y)28.29%
ROCE(5y)39.1%
ROICexcg growth 3Y-58.2%
ROICexcg growth 5Y0.34%
ROICexc growth 3Y-57.26%
ROICexc growth 5Y11.73%
OM growth 3Y-32.15%
OM growth 5Y1.37%
PM growth 3Y-32.27%
PM growth 5Y14.1%
GM growth 3Y-10.98%
GM growth 5Y-0.33%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.1 | ||
| Cap/Depr | 62.43% | ||
| Cap/Sales | 4.07% | ||
| Interest Coverage | 6.4 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 4.67 | ||
| Quick Ratio | 1.56 | ||
| Altman-Z | 4.13 |
F-Score5
WACC8.96%
ROIC/WACC0.61
Cap/Depr(3y)215.46%
Cap/Depr(5y)151.7%
Cap/Sales(3y)12.85%
Cap/Sales(5y)8.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-18.18%
EPS 3Y-44.47%
EPS 5Y-0.49%
EPS Q2Q%-88.24%
EPS Next Y-58.44%
EPS Next 2Y-24.31%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-5.45%
Revenue growth 3Y-20.32%
Revenue growth 5Y2.17%
Sales Q2Q%-15.71%
Revenue Next Year-8.84%
Revenue Next 2Y-2.7%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-22.26%
EBIT growth 3Y-45.94%
EBIT growth 5Y3.57%
EBIT Next Year56.89%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y64.76%
FCF growth 3Y-62.21%
FCF growth 5Y-9.49%
OCF growth 1Y-203.14%
OCF growth 3Y-30.31%
OCF growth 5Y13.33%