Smith & Wesson BrandsSTU:SWS -1.69%62 WACC % is 3.41% as of Jun. 25, 2026, which is 42% below its 10-year median of 5.93. GuruFocus rates STU:SWS with a GF Score™ of 62/100 and a GF Value™ of €12.03 (Modestly Overvalued). The stock has 8 warning signs investors should review. Among 358 Aerospace & Defense companies, Smith & Wesson Brands ranks better than 86.59% on this metric.
As of today (2026-06-25), Smith & Wesson Brands's weighted average cost of capital is 3.41%%. Smith & Wesson Brands's ROIC % is 4.67% (calculated using TTM income statement data).
Smith & Wesson Brands generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Smith & Wesson Brands (STU:SWS) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Smith & Wesson Brands's weighted average cost of capital is 3.41%%. Smith & Wesson Brands's ROIC % is 4.67% (calculated using TTM income statement data).
Smith & Wesson Brands generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* 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.
For the Aerospace & Defense subindustry, Smith & Wesson Brands's WACC %, along with its competitors' market caps and WACC % 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 WACC % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Smith & Wesson Brands's WACC % distribution charts can be found below:
* The bar in red indicates where Smith & Wesson Brands's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Smith & Wesson Brands's market capitalization (E) is €633.635 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Apr. 2026, Smith & Wesson Brands's latest one-year quarterly average Book Value of Debt (D) is €91.3826 Mil.
a) weight of equity = E / (E + D) = 633.635 / (633.635 + 91.3826) = 0.874
b) weight of debt = D / (E + D) = 91.3826 / (633.635 + 91.3826) = 0.126
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.41%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Smith & Wesson Brands's beta is -0.1642.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.41% + -0.1642 * 6% = 3.4248%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Apr. 2026, Smith & Wesson Brands's interest expense (positive number) was €4.115 Mil. Its total Book Value of Debt (D) is €91.3826 Mil.
Cost of Debt = 4.115 / 91.3826 = 4.503%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 5.631 / 21.418 = 26.29%.
Smith & Wesson Brands's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.874
*
3.4248%
+
0.126
*
4.503%
*
(1 - 26.29%)
=
3.41%
* 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 (STU:SWS) has a WACC % of 3.41% as of Jun. 25, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Smith & Wesson Brands and its competitors. This is 42% below median its historical median of 5.93. Over the past decade, Smith & Wesson Brands' WACC % has ranged from 0.69 to 10.88. According to the industry distribution chart, Smith & Wesson Brands ranks #48 out of 358 companies in the Aerospace & Defense industry, placing it in the top 13.4%.
Is Smith & Wesson Brands' WACC % too high?
Smith & Wesson Brands' current WACC % of 3.41% is 42% below median its 10-year median of 5.93. Over the past 10 years, this metric has ranged from a low of 0.69 to a high of 10.88. The Aerospace & Defense industry median WACC % is 9.87. Smith & Wesson Brands' value of 3.41% is 65.5% below this industry median. Based on the distribution chart, Smith & Wesson Brands ranks #48 out of 358 companies in the Aerospace & Defense industry, which is in the top quartile — a strong position relative to peers. Overall, Smith & Wesson Brands has a GF Score™ of 62/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Smith & Wesson Brands' WACC % compare to SPCE and PKE?
According to the Aerospace & Defense industry distribution chart, Smith & Wesson Brands ranks #48 out of 358 companies for WACC %. This places Smith & Wesson Brands in the top 13% of its industry — outperforming the majority of peers. The industry median WACC % is 9.87. Smith & Wesson Brands' value of 3.41% is 65.5% below this benchmark. Historically, Smith & Wesson Brands' own WACC % has ranged from 0.69 to 10.88 over the past decade. While the company's 10-year median is 5.93 vs. the industry median of 9.87, Smith & Wesson Brands has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Aerospace & Defense company?
The median WACC % among Aerospace & Defense companies is 9.87, based on 358 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Smith & Wesson Brands's current WACC % of 3.41% is 65.5% below 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 WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Smith & Wesson Brands and its competitors. For the Aerospace & Defense industry, the median WACC % is 9.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Smith & Wesson Brands's current WACC % is 3.41%, which is 42% below median its own 10-year median of 5.93. 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 (STU:SWS) is currently considered Modestly Overvalued. The stock's GF Value™ is €12.03, compared to a current price of €14.26 — trading 18.5% above its estimated fair value. The current WACC % is 3.41%, which is 42% below median its 10-year median of 5.93 and 65.5% below the Aerospace & Defense industry median of 9.87. Smith & Wesson Brands' overall GF Score™ is 62/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Smith & Wesson Brands (STU:SWS), the current WACC % is 3.41% as of Jun. 25, 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 (STU:SWS) Overvalued in 2026?
Based on GuruFocus' analysis, Smith & Wesson Brands stock appears to be overvalued.
The current stock price of €14.26 is trading 18.5% above its estimated GF Value™ of €12.03.
GuruFocus considers Smith & Wesson Brands to be Modestly Overvalued.
Key valuation signals for STU:SWS:
WACC %: 3.41% (42% below median its 10-year median of 5.93)
GF Value™: €12.03 vs. price of €14.26 (18.5% above fair value)
Industry Position: 65.5% below the Aerospace & Defense median (#48 of 358)
No single metric tells the full story. See the STU: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.
62GF Score
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