Red Cat Holdings, Inc. (RCAT) vs Smith & Wesson Brands, Inc. (SWBI)

Red Cat Holdings, Inc. and Smith & Wesson Brands, Inc. are both Aerospace & Defense companies. Red Cat Holdings, Inc. is the larger, with a market value of $1.1B against $628.5M — 1.7× the size. Red Cat Holdings, Inc. has negative trailing earnings, so its P/E is not meaningful; Smith & Wesson Brands, Inc. trades at 26.4×. Red Cat Holdings, Inc. grew revenue faster over the last twelve months: 1,977.5% against 17.0%. Smith & Wesson Brands, Inc. has the higher net margin (4.44% vs −136.3%) and the higher return on invested capital (5.42% vs −45.8%). Across the 19 metrics below, Smith & Wesson Brands, Inc. leads on 14 and Red Cat Holdings, Inc. on 5.

Valuation

Metric RCAT SWBI Aerospace & Defense median
P/E n/m 26.39 33.00
P/S 12.74 1.16 3.63
P/B 1.93 1.71 3.24
Price to free cash flow n/m 7.77 34.01
EV/EBITDA n/m 10.24 18.69
EV/Sales 8.32 1.24 3.94
Earnings yield (12.16%) 3.79% 1.31%
Free cash flow yield (17.30%) 12.86% 0.00%

Profitability

Metric RCAT SWBI Aerospace & Defense median
Gross margin 9.75% 27.44% 25.48%
Operating margin (150.15%) 6.60% 4.54%
Net margin (136.27%) 4.44% 2.22%
Free cash flow margin (220.44%) 14.92% 0.00%
Return on equity (34.40%) 6.63% 6.43%
Return on assets (30.05%) 4.54% 2.70%
Return on invested capital (45.82%) 5.42% 1.56%

Growth

Metric RCAT SWBI Aerospace & Defense median
Revenue growth (TTM) 1,977.49% 16.96% 18.43%
EPS growth (last fiscal year) (28.95%) 36.67% —
Revenue growth, 5-year CAGR 52.12% (13.13%) 9.62%
Net income growth, 5-year CAGR 0.00% (40.70%) 0.00%

Health

Metric RCAT SWBI Aerospace & Defense median
Debt to equity 0.00 0.19 0.24
Current ratio 14.86 3.62 2.72
Net debt to EBITDA 2.60 0.30 1.12

Dividend

Metric RCAT SWBI Aerospace & Defense median
Dividend yield — 3.37% 1.04%
Payout ratio 0.00 0.53 0.00

Size

Metric RCAT SWBI Aerospace & Defense median
Market cap 1.05b 628.47m 2.52b

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