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

Zacks Equity Research
·3 min read

Smith & Wesson (SWBI) closed the most recent trading day at $16.06, moving +1.58% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.14%. Meanwhile, the Dow gained 0.9%, and the Nasdaq, a tech-heavy index, lost 1.37%.

Heading into today, shares of the firearm maker had lost 4.18% over the past month, lagging the Consumer Discretionary sector's gain of 2.33% and the S&P 500's gain of 2.25% in that time.

Investors will be hoping for strength from SWBI as it approaches its next earnings release. On that day, SWBI is projected to report earnings of $0.62 per share, which would represent year-over-year growth of 588.89%. Our most recent consensus estimate is calling for quarterly revenue of $225.30 million, up 45.93% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.42 per share and revenue of $819.70 million, which would represent changes of +195.12% and +20.83%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for SWBI. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SWBI is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that SWBI has a Forward P/E ratio of 6.53 right now. This represents a discount compared to its industry's average Forward P/E of 14.

The Leisure and Recreation Products industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 36, putting it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research