DCF Tool

SWBI

Smith & Wesson Brands Inc – Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Smith & Wesson Brands, Inc. is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson®, M&P®, Thompson/Center Arms™, and Gemtech® brands. The company also provides manufacturing services, including forging, machining, and precision plastic injection molding services.
Analysis Results
Intrinsic Value $47.97
Latest Price $15.12
Relative Value 68% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 10.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 127 116
2023 141 118
2024 156 120
2025 173 121
2026 192 123
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 2700 million. This corresponds to a present value of 1580 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 599 million. Adding in the terminal value gives a total present value of 2180 million.

There are presently 45.5 million outstanding shares, so the intrinsic value per share is 47.97.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 268,253,000
Current Cash 113,017,000
Current Liabilities 125,655,000
Current Debt 1,087,000
Non-Cash Working Capital (NCWC) 30,668,000
Change in NCWC -110,810,000
EBIT 319,632,000
Tax Provision 74,394,000
Depreciation and Amortization 31,575,000
Capital Expenditure -22,684,000
Unlevered Free Cash Flow 142,928,973
Current Assets 395,851,000
Current Cash 125,398,000
Current Liabilities 129,971,000
Current Debt 996,000
Non-Cash Working Capital (NCWC) 141,478,000
Change in NCWC -11,889,000
EBIT 49,843,000
Tax Provision 1,281,000
Depreciation and Amortization 54,058,000
Capital Expenditure -14,744,000
Unlevered Free Cash Flow 77,268,000
Current Assets 298,684,000
Current Cash 41,015,000
Current Liabilities 111,283,000
Current Debt 6,981,000
Non-Cash Working Capital (NCWC) 153,367,000
Change in NCWC 25,814,000
EBIT 48,452,000
Tax Provision 10,328,000
Depreciation and Amortization 53,859,000
Capital Expenditure -34,465,000
Unlevered Free Cash Flow 76,247,088
Current Assets 270,364,000
Current Cash 48,860,000
Current Liabilities 100,682,000
Current Debt 6,731,000
Non-Cash Working Capital (NCWC) 127,553,000
Change in NCWC 14,584,000
EBIT 27,048,000
Tax Provision -2,511,000
Depreciation and Amortization 52,075,000
Capital Expenditure -19,050,000
Unlevered Free Cash Flow 74,657,000
Current Assets 318,441,000
Current Cash 61,549,000
Current Liabilities 151,245,000
Current Debt 7,322,000
Non-Cash Working Capital (NCWC) 112,969,000
Change in NCWC 85,854,000
EBIT 199,939,000
Tax Provision 63,452,000
Depreciation and Amortization 50,213,000
Capital Expenditure -35,514,000
Unlevered Free Cash Flow 234,176,623
Current Assets 333,231,000
Current Cash 191,279,000
Current Liabilities 122,592,000
Current Debt 7,755,000
Non-Cash Working Capital (NCWC) 27,115,000
Change in NCWC -46,728,000
EBIT 158,643,000
Tax Provision 51,135,000
Depreciation and Amortization 41,237,000
Capital Expenditure -29,789,000
Unlevered Free Cash Flow 67,452,585
Current Assets 197,076,000
Current Cash 42,222,000
Current Liabilities 81,011,000
Current Debt 0
Non-Cash Working Capital (NCWC) 73,843,000
Change in NCWC -4,394,000
EBIT 89,628,000
Tax Provision 28,905,000
Depreciation and Amortization 30,893,000
Capital Expenditure -28,591,000
Unlevered Free Cash Flow 54,630,734
Current Assets 239,171,000
Current Cash 68,860,000
Current Liabilities 92,543,000
Current Debt 469,000
Non-Cash Working Capital (NCWC) 78,237,000
Change in NCWC 31,309,000
EBIT 150,988,000
Tax Provision 48,095,000
Depreciation and Amortization 21,704,000
Capital Expenditure -62,794,000
Unlevered Free Cash Flow 88,093,617
Current Assets 229,566,000
Current Cash 100,487,000
Current Liabilities 82,593,000
Current Debt 442,000
Non-Cash Working Capital (NCWC) 46,928,000
Change in NCWC -4,142,000
EBIT 132,834,000
Tax Provision 46,500,000
Depreciation and Amortization 16,730,000
Capital Expenditure -41,523,000
Unlevered Free Cash Flow 55,607,434
Current Assets 190,714,000
Current Cash 56,717,000
Current Liabilities 83,345,000
Current Debt 418,000
Non-Cash Working Capital (NCWC) 51,070,000
Change in NCWC -1,907,000
EBIT 44,916,000
Tax Provision 12,582,000
Depreciation and Amortization 16,729,000
Capital Expenditure -14,585,000
Unlevered Free Cash Flow 30,667,978

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