Smith & Wesson Stock Falls on Earnings Miss, Tariff Woes

Core Viewpoint - Smith & Wesson Inc. reported disappointing fourth-quarter earnings for fiscal year 2025, leading to a 12% drop in stock price, with revenue and earnings per share missing expectations significantly [1][2][6] Financial Performance - Revenue for the quarter was $140.76 million, missing expectations of $153.41 million and down 18% from $159.15 million year-over-year [1][2] - Earnings per share (EPS) were 20 cents, below the expected 23 cents and 55% lower compared to the same quarter last year [2] Market Sentiment - The stock's decline erases previous gains and reflects bearish sentiment among traders, with significant options activity indicating volatility expectations [4][5] - Despite the negative earnings report, there is a potential for swing trading opportunities as the company enters a seasonally strong period, particularly for longarm sales [3][7] Business Environment - Smith & Wesson faces challenges such as excess inventory and margin compression due to slowing consumer demand, compounded by a difficult macroeconomic environment [6] - The company has not provided full-year guidance for fiscal year 2026 due to tariff uncertainties, which may further pressure stock performance [2] Future Outlook - Analysts have a 12-month stock price forecast of $12.75, indicating a potential upside of 46.05% from the current price of $8.73 [9] - Concerns over civil unrest and economic uncertainty may drive demand for firearms, although regulatory concerns could impact future sales [8][10]