NEW YORK (TheStreet) -- Shares of Smith & Wesson Holding Corp. (SWHC - Get Report) are down -11.71% to $15.01 in after-hours trading after it reported that net income fell -4.6% to $170.4 million, or 44 cents per diluted share, versus the $178.7 million, or 38 cents per diluted share, a year ago in the the fourth quarter ended April 30.
Looking forward, the firearms maker expects to earn between 23 cents and 25 cents a share in its fiscal 2015 first quarter, and between $1.30 and $1.40 a share for the full year.
Analysts had been looking, on average, for $1.50 a share for full-year earnings.
Separately, TheStreet Ratings team rates SMITH & WESSON HOLDING CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SMITH & WESSON HOLDING CORP (SWHC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SWHC's revenue growth has slightly outpaced the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Leisure Equipment & Products industry and the overall market, SMITH & WESSON HOLDING CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 43.57% is the gross profit margin for SMITH & WESSON HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.24% is above that of the industry average.
- Powered by its strong earnings growth of 34.61% and other important driving factors, this stock has surged by 86.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SWHC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full analysis from the report here: SWHC Ratings Report