Smith & Wesson Brands, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that Smith & Wesson Brands, Inc. (NASDAQ:SWBI) filed its quarterly result this time last week. The early response was not positive, with shares down 9.6% to US$9.82 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$116m, statutory earnings beat expectations by a notable 33%, coming in at US$0.04 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Smith & Wesson Brands after the latest results.

View our latest analysis for Smith & Wesson Brands

After the latest results, the three analysts covering Smith & Wesson Brands are now predicting revenues of US$507.5m in 2026. If met, this would reflect a satisfactory 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to fall 11% to US$0.60 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$524.4m and earnings per share (EPS) of US$0.77 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of US$15.17, suggesting the downgrades are not expected to have a long-term impact on Smith & Wesson Brands' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Smith & Wesson Brands, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$12.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Smith & Wesson Brands shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Smith & Wesson Brands' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.3% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.4% annually for the foreseeable future. Although Smith & Wesson Brands' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Smith & Wesson Brands. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Smith & Wesson Brands analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Smith & Wesson Brands .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.