Smith & Wesson Holding Corp (NASDAQ:SWHC) reports earnings on Thursday, but SWHC stock is flinching early.
SWHC shares were off 5% in Wednesday’s morning trade, about 30 hours away from the company’s fiscal first-quarter earnings report. It’s not an uncommon event — Smith & Wesson has gotten shy ahead of several of its past few announcements.
The good news for SWHC stock holders? Everything typically works out just fine.
The past four quarters have boded well for Smith & Wesson, with shares rallying after each report, albeit not immediately on the news. Last quarter sent SWHC stock off to the races. Shares were stuck at their lowest point since February, and a fiscal Q4 earnings beat launched what would be a roughly 35% rally from peak to trough.
Smith & Wesson is slated to report earnings on Thursday after the bell. Currently, analysts expect earnings to rise from 32 cents in the year-ago period to 53 cents. Revenues, meanwhile, are expected to climb from $147.76 million to $198.16 million.
A streak of increased background checks dating all the way back to last year make it seem likely that SWHC will beat expectations, just as it has every quarter since the end of 2013.
Analysts appear mildly confident in Smith & Wesson right now. Of the six firms covering SWHC stock right now, four rate it a “buy,” with the other two at “hold.”
One thing that should be reason for concern: Today’s dip in Smith & Wesson shares has the stock crashing through its 50-day moving average at $28.65. It’s the first time SWHC has even sniffed the MA since mid-June, when it was able to convert it from overhead resistance to support. If Smith & Wesson could claw back some of the losses and finish up closer to that MA, that would be a more encouraging sign.
Sturm, Ruger & Company (NYSE:RGR) shares were off more than 2% in sympathy.
