SWBISmith & Wesson Brands, Inc.
Is the business good?
The checks split: earnings fully cash-backed (4.2×), but margins compressing.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 4% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SWBI?
Smith & Wesson Brands, Inc. earns 8.3% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 0.75 points below what the capital costs: growth destroys value
- Operating margin
- 6.6%
Operating margin · Aerospace & Defense median 9.6% · 12 months to Q1 2027
- Cash conversion
- 4.23×
Cash conversion · 1.01× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +2.7%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2021 | 30% |
| FY2022 | 29% |
| FY2023 | 10% |
| FY2024 | 8.8% |
| FY2025 | 5.0% |
| FY2026 | 5.6% |
Details›
- Gross margin12 months to Q1 2027
- 27%
- Operating margin12 months to Q1 2027
- 6.6%
- Net margin12 months to Q1 2027
- 4.4%
- Free cash flow margin
- 15%
- R&D as % of revenue
- 1.8%
- Revenue, trailing twelve months
- $551M
- Free cash flow, trailing twelve months
- $82M
- Net income, trailing twelve months
- $24M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 8.3%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Aerospace & Defense
Ranks #4 of 36 by RyuScore