US Firearm Background Checks Drop 7.7% Year-over-Year
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy SWBI?
Source: seekingalpha
- Background Check Decline: The FBI reported that firearm background checks in February 2023 totaled 2,151,807, reflecting a 7.7% year-over-year decline, indicating weakened market demand that could adversely affect sales for related companies.
- Significant Monthly Comparison: Compared to January 2023, background checks fell by 9.9%, suggesting a decrease in consumer willingness to purchase firearms, which may lead to inventory pressures for manufacturers.
- Historical High Point Review: Background checks peaked at 4,691,738 in March 2021, with a progressive decline observed in subsequent years, highlighting the volatility of market demand and the cyclical nature of the industry.
- Future Demand Expectations: Industry insiders anticipate that firearm demand in 2026 will be broadly similar to that of 2025, with macroeconomic risks such as inflation, interest rates, and consumer spending pressures posing challenges rather than a collapse in underlying interest.
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Analyst Views on SWBI
Wall Street analysts forecast SWBI stock price to fall
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 14.240
Low
11.00
Averages
11.00
High
11.00
Current: 14.240
Low
11.00
Averages
11.00
High
11.00
About SWBI
Smith & Wesson Brands, Inc. is a manufacturer and designer of firearms. The Company is engaged in delivering a portfolio of handgun, long gun, and suppressor products to the global consumer and professional markets under the Smith & Wesson and Gemtech brands. It sells its products to a variety of customers, including firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and throughout the world. It also provides forging and machining services to third parties. It manufactures its products at its facilities in Maryville, Tennessee; Springfield, Massachusetts, and Houlton, Maine. Its products include BodyGuard 2.0, a micro handgun concealed carry pistol; several variants of its Model 1854 Lever-Action Rifle series; M&P FPC in 40 caliber and 10mm; the CSX E-Series; no-lock Classic revolvers and Ultimate Carry revolvers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Sales Growth Outlook: The company expects Q4 sales growth of 10% to 12%, driven by strong momentum in handgun sales, which will further enhance the company's performance outlook.
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- Improved Profitability: EBITDAS reached $16.8 million, up nearly 21%, with adjusted EPS of $0.08 compared to $0.03 in the prior year, showcasing the company's success in cost control and pricing power.
- Cash Flow Enhancement: Operating cash flow grew by over $30 million year-over-year to $20.5 million, a significant improvement from $9.8 million in the prior year, reflecting the company's positive response to operational efficiency and market demand.
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