Non Lethal Self Defense Will Captivate Global Markets

Key Takeaways

• Mainstream acceptance of non-lethal defense and Amazon partnership may significantly boost sales, margins, and brand visibility, strengthening Byrna's market position.
  
• Expansion into subscription and smart product models, plus global distributor growth, should enhance recurring revenue, margin stability, and long-term earnings resilience.
  
• Reliance on few products and retail partners, evolving regulations, and changing market trends create significant risks for sustained growth, margins, and long-term earnings.

Catalysts

A less-lethal self-defense technology company, develops, manufactures, and sells less-lethal personal security solutions in the United States, South Africa, Europe, South America, Asia, and Canada.

• While analysts broadly agree that Amazon and Buy with Prime will fuel e-commerce growth, the compact launcher's addition to Prime Day and Amazon's vastly higher traffic have the potential to drive a step-change in both unit sales and brand awareness, accelerating revenue growth and supporting sustained expansion of gross and net margins beyond consensus expectations.
  
• Analyst consensus already sees margin expansion from the high-margin Compact Launcher, but this could be understated as the CL platform is set to be the basis for multiple new models targeting a wider demographic spectrum with lower manufacturing costs, driving both accelerated top-line growth and ongoing improvement of EBITDA and net margin through product mix optimization.
  
• Recent and ongoing normalization of non-lethal defense products is driving mainstream acceptance, positioning Byrna to capture outsized share of a rapidly expanding market as public concerns around safety and resistance to lethal firearms increase, supporting long-term revenue compounding well above historical rates.
  
• The introduction of technology-enabled, recurring-revenue models such as Byrna Care and the upcoming "smart launcher" with SaaS-connected features could transform the business into a hybrid hardware-subscription model, enhancing average customer lifetime value, reducing cyclicality, and materially expanding gross margins and earnings predictability over time.
  
• With strong growth in international distributor sales-including from Latin America, where Byrna retains a valuable buy-back option-Byrna is uniquely positioned to capitalize on global demand for non-lethal security, where regulatory constraints on lethal arms can enable faster penetration and higher-margin licensing or royalty income, driving both topline and bottom-line growth beyond US-focused forecasts.

Byrna Technologies Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Byrna Technologies compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Byrna Technologies's revenue will grow by 32.3% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 14.3% today to 12.5% in 3 years time.
• The bullish analysts expect earnings to reach $30.0 million (and earnings per share of $1.24) by about July 2028, up from $14.8 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 43.2x on those 2028 earnings, up from 33.3x today. This future PE is greater than the current PE for the CA Aerospace & Defense industry at 35.1x.
• Analysts expect the number of shares outstanding to grow by 0.86% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.07%, as per the Simply Wall St company report.

Byrna Technologies Future Earnings Per Share Growth

Risks

• Increased government regulation or negative shifts in public sentiment against less-lethal or self-defense weapons could restrict Byrna's ability to sell or market products in key markets, potentially limiting future revenue growth and hampering international expansion.
  
• The company's notable revenue growth for the quarter was heavily driven by the initial launch and stocking orders for the Compact Launcher, but there were visible signs of cannibalization within Byrna's own product line and underlying softness in consumer demand, suggesting potential future volatility in revenues and earnings if new launches fail to repeat past success.
  
• Byrna's heavy dependence on a limited number of product lines and their reliance on expanding relationships with a handful of key retail partners exposes the firm to risks if competitors introduce superior or more technologically advanced less-lethal options, which could compress net margins and erode core revenues.
  
• Secular trends toward increased urbanization, declining crime rates, and broader adoption of AI-enabled security and non-physical deterrence systems may gradually lower the perceived need for personal self-defense launchers, leading to slower long-term revenue growth and diminished earnings potential.
  
• High inventory levels used to support current product launches could backfire in the event of a shift in demand, ongoing supply chain disruptions, or greater commoditization in the less-lethal defense industry, creating the risk of margin compression and balance sheet stress if inventory must be written down or heavily discounted.

Valuation

• The assumed bullish price target for Byrna Technologies is $46.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Byrna Technologies's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $46.0, and the most bearish reporting a price target of just $33.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $240.0 million, earnings will come to $30.0 million, and it would be trading on a PE ratio of 43.2x, assuming you use a discount rate of 7.1%.
• Given the current share price of $21.68, the bullish analyst price target of $46.0 is 52.9% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.