NEW YORK (TheStreet) -- Shares of Smith & Wesson (SWHC)  were stumbling 7.26% to $25.56 on heavy trading volume mid-afternoon Monday after the firearms manufacturer said it lost a bid to supply the U.S. Army with its M9 semi-automatic pistol. 

Smith & Wesson was looking to sell the Army a model that's equipped with a new Modular Handgun System (MHS).

"We and our partner in the pursuit of the U.S. Army's Modular Handgun System, or MHS, solicitation, to replace the M9 standard Army sidearm have been notified by the Department of the Army that our proposal was not selected to advance to the next phase of the competition," the Springfield, MA-based company said in a recent SEC filing. 

It's unclear which companies are still in the running for the contract, according to the New York Post

Additionally, Cowen said that the MHS program wasn't included in the company's guidance, TheFly reports. The firm added that it was "surprised" Smith & Wesson wasn't selected for the contract. 

Cowen has an "outperform" rating on Smith & Wesson and said its shares look cheap. 

About 4.01 million of the company's shares have changed hands so far today vs. its average volume of 2.16 million shares per day.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

TheStreet Ratings team rates Smith & Wesson as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that it rates. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently it does not see any significant weaknesses which are likely to detract from the generally positive outlook.

You can view the full analysis from the report here: SWHC

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