Is Smith & Wesson Brands, Inc. overvalued or undervalued?

As of 18 June 2025, the valuation grade for Smith & Wesson Brands, Inc. has moved from fair to very attractive, indicating a significant improvement in its perceived value. The company appears to be undervalued, particularly when considering its P/E ratio of 22, which is relatively low compared to its peer Virgin Galactic Holdings, Inc. with a P/E of approximately 48. Additionally, the EV to EBITDA ratio stands at 11.69, suggesting a favorable valuation relative to earnings before interest, taxes, depreciation, and amortization.
In the context of its industry, Smith & Wesson's Price to Book Value of 1.89 and a dividend yield of 3.49% further reinforce its attractiveness as an investment. While the stock has struggled in the past year with a return of -28.49% compared to the S&P 500's 17.14%, it has shown resilience with a recent one-month return of 16.87% against the S&P 500's 2.33%. This performance may indicate a potential turnaround, aligning with its improved valuation grade.