Smith & Wesson Brands Inc. Common Stock (SWBI)

FairStock Score: 46/100 — MIXED

Key Financials

Strengths

• Generates $53 million in annual free cash flow (8.0% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Conservative balance sheet with debt-to-equity of just 0.30, providing financial flexibility
• Revenue growth of 17.1% demonstrates strong top-line momentum
• Attractive 3.4% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($7) with negative 125% margin of safety—limited downside protection

AI Analysis

Smith & Wesson Brands Inc. Common Stock is a micro-cap industrials company valued at $664 million. The business generates $486 million in annual revenue with a 0.8% net margin and $53 million in free cash flow. From a quality standpoint, Smith shows solid Piotroski F-Score of 7/9 and healthy Altman Z-Score of 4.0. On valuation, the stock is commanding a steep 63.1x multiple, with trades far above its Graham Number ($7) with no margin of safety. Growth dynamics show revenue growing at 17.1% and profit growth of 78.5%. The 3.4% dividend yield adds an income component for patient holders. Our composite FairStock Score of 46/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Smith's 17% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $53 million in annual free cash flow (8.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 63x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer