Smith & Wesson Brands, Inc. (NASDAQ:SWBI) Sees Large Decline in Short Interest

Key Points

• Short interest dropped 15.2% in March to 1,828,625 shares (about 4.2% of shares sold short) with a days-to-cover ratio of 2.9.
• Analysts are mixed: the consensus rating is "Hold" with a $14 consensus target, though Lake Street raised its target to $14 and Wall Street Zen upgraded the stock to a "strong-buy."
• Smith & Wesson beat Q1 estimates (EPS $0.08 vs. $0.05 expected; revenue $135.7M, up 17.1% YoY) and pays a $0.13 quarterly dividend (3.5% yield) despite a high payout ratio of 226%.

Smith & Wesson Brands, Inc. (NASDAQ:SWBI - Get Free Report) was the target of a large drop in short interest during the month of March. As of March 31st, there was short interest totaling 1,828,625 shares, a drop of 15.2% from the March 15th total of 2,156,671 shares. Based on an average daily trading volume, of 631,632 shares, the days-to-cover ratio is presently 2.9 days. Approximately 4.2% of the shares of the company are sold short.

Wall Street Analysts Forecast Growth

A number of equities analysts have weighed in on the stock. Lake Street Capital boosted their target price on shares of Smith & Wesson Brands from $11.00 to $14.00 and gave the stock a "buy" rating in a research note on Friday, March 6th. Wall Street Zen upgraded shares of Smith & Wesson Brands from a "hold" rating to a "strong-buy" rating in a report on Sunday, March 8th. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Smith & Wesson Brands in a research report on Friday, March 27th. One analyst has rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Hold" and a consensus target price of $14.00.

Smith & Wesson Brands Stock Performance

Smith & Wesson Brands stock traded up $0.01 during midday trading on Friday, reaching $14.85. The stock had a trading volume of 165,825 shares, compared to its average volume of 591,744. Smith & Wesson Brands has a 12 month low of $7.73 and a 12 month high of $15.40. The firm's 50-day moving average price is $13.41 and its 200 day moving average price is $11.16. The firm has a market capitalization of $660.56 million, a PE ratio of 64.57 and a beta of 0.90. The company has a quick ratio of 1.48, a current ratio of 4.50 and a debt-to-equity ratio of 0.29.

Smith & Wesson Brands (NASDAQ:SWBI - Get Free Report) last announced its quarterly earnings data on Thursday, March 5th. The company reported $0.08 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.05 by $0.03. Smith & Wesson Brands had a return on equity of 3.07% and a net margin of 2.24%.The business had revenue of $135.71 million for the quarter, compared to analysts' expectations of $125.59 million. During the same period in the previous year, the business posted $0.02 EPS. The firm's quarterly revenue was up 17.1% compared to the same quarter last year. As a group, research analysts predict that Smith & Wesson Brands will post 0.47 earnings per share for the current fiscal year.

Smith & Wesson Brands Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, April 2nd. Shareholders of record on Thursday, March 19th were paid a $0.13 dividend. The ex-dividend date of this dividend was Thursday, March 19th. This represents a $0.52 annualized dividend and a yield of 3.5%. Smith & Wesson Brands's dividend payout ratio is currently 226.09%.

Institutional Trading of Smith & Wesson Brands

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Caitong International Asset Management Co. Ltd purchased a new position in shares of Smith & Wesson Brands in the 4th quarter worth about $30,000. Tower Research Capital LLC TRC increased its holdings in Smith & Wesson Brands by 205.9% in the 2nd quarter. Tower Research Capital LLC TRC now owns 6,240 shares of the company's stock worth $54,000 after buying an additional 4,200 shares in the last quarter. Rafferty Asset Management LLC boosted its position in Smith & Wesson Brands by 12.2% in the second quarter. Rafferty Asset Management LLC now owns 11,403 shares of the company's stock worth $99,000 after purchasing an additional 1,237 shares during the last quarter. Ameriprise Financial Inc. purchased a new stake in shares of Smith & Wesson Brands during the 2nd quarter worth approximately $101,000. Finally, Jones Financial Companies Lllp raised its holdings in Smith & Wesson Brands by 42.0% during the 3rd quarter. Jones Financial Companies Lllp now owns 10,631 shares of the company's stock valued at $103,000 after buying an additional 3,142 shares during the period. Hedge funds and other institutional investors own 59.33% of the company's stock.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc is a leading American manufacturer of firearms and related products, designing, producing and marketing a broad array of handguns, long guns and shooting accessories. The company’s portfolio includes revolvers, semi-automatic pistols and rifles under well-known brands such as M&P® (Military & Police) and Performance Center®, which are used by military, law enforcement, commercial and private customers. In addition to complete firearms, Smith & Wesson offers suppressors, optics mounts, holsters and other shooting accessories to support a full spectrum of professional and recreational shooting activities.

Founded in 1852 by Horace Smith and Daniel B.

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