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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Smith & Wesson Brands's Degree of Operating Leverage for the quarter that ended in Apr. 2026 was 2.43. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Smith & Wesson Brands's Degree of Operating Leverage or its related term are showing as below:
FRA:SWS's Degree of Operating Leverage is ranked worse than 64.37% of 334
companies
in the Aerospace & Defense industry
Industry Median: 1.245
vs FRA:SWS: 2.43
Smith & Wesson Brands (FRA:SWS) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Smith & Wesson Brands Degree of Operating Leverage Related Terms
Smith & Wesson Brands Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Smith & Wesson Brands's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Smith & Wesson Brands Degree of Operating Leverage Chart
FRA:SWS vs RGR, PKE, SATL: Degree of Operating Leverage Comparison
For the Aerospace & Defense subindustry, Smith & Wesson Brands's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Smith & Wesson Brands Degree of Operating Leverage vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Smith & Wesson Brands's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Smith & Wesson Brands's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 2.43 mean?
Smith & Wesson Brands (FRA:SWS) has a Degree of Operating Leverage of 2.43 as of Apr. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Smith & Wesson Brands and its competitors. According to the industry distribution chart, Smith & Wesson Brands ranks #215 out of 334 companies in the Aerospace & Defense industry, placing it in the top 64.4%.
Is Smith & Wesson Brands' Degree of Operating Leverage too high?
Smith & Wesson Brands' current Degree of Operating Leverage is 2.43. The Aerospace & Defense industry median Degree of Operating Leverage is 1.25. Smith & Wesson Brands' value of 2.43 is 95.2% above this industry median. Based on the distribution chart, Smith & Wesson Brands ranks #215 out of 334 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, Smith & Wesson Brands has a GF Score™ of 60/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Smith & Wesson Brands' Degree of Operating Leverage compare to RGR and PKE?
According to the Aerospace & Defense industry distribution chart, Smith & Wesson Brands ranks #215 out of 334 companies for Degree of Operating Leverage. This places Smith & Wesson Brands in the lower half of its industry. The industry median Degree of Operating Leverage is 1.25. Smith & Wesson Brands' value of 2.43 is 95.2% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for an Aerospace & Defense company?
The median Degree of Operating Leverage among Aerospace & Defense companies is 1.25, based on 334 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Smith & Wesson Brands's current Degree of Operating Leverage of 2.43 is 95.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Smith & Wesson Brands and its competitors. For the Aerospace & Defense industry, the median Degree of Operating Leverage is 1.25 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Smith & Wesson Brands's current Degree of Operating Leverage is 2.43. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Smith & Wesson Brands stock overvalued right now?
Based on GuruFocus' analysis, Smith & Wesson Brands (FRA:SWS) is currently considered Fairly Valued. The stock's GF Value™ is €11.83, compared to a current price of €11.98 — trading 1.2% above its estimated fair value. The current Degree of Operating Leverage is 2.43 and 95.2% above the Aerospace & Defense industry median of 1.25. Smith & Wesson Brands' overall GF Score™ is 60/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Smith & Wesson Brands (FRA:SWS), the current Degree of Operating Leverage is 2.43 as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Smith & Wesson Brands (FRA:SWS) Overvalued in 2026?
Based on GuruFocus' analysis, Smith & Wesson Brands stock appears to be overvalued.
The current stock price of €11.98 is trading 1.2% above its estimated GF Value™ of €11.83.
GuruFocus considers Smith & Wesson Brands to be Fairly Valued.
Key valuation signals for FRA:SWS:
Degree of Operating Leverage: 2.43
GF Value™: €11.83 vs. price of €11.98 (1.2% above fair value)
Industry Position: 95.2% above the Aerospace & Defense median (#215 of 334)
No single metric tells the full story. See the FRA:SWS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Smith & Wesson Brands Inc is a U.S.-based company engaged in manufacturing and selling firearms. It operates under one reportable segment: Firearms, which includes firearms distribution and manufacturing services. The company manufactures handguns, long guns, sporting rifles, shooting gear, and suppressor products. The company sells its products under the Smith and Wesson and Gemtech brands, which are used for defense, law enforcement, hunting, and sporting purposes. Geographically, it sells products globally, with maximum income being generated by the U.S. market from its handgun products.
60GF Score
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