Craig-Hallum initiates Byrna Technologies stock with Buy rating

Investing.com - Craig-Hallum initiated coverage on Byrna Technologies Inc. (NASDAQ:BYRN) with a Buy rating and a price target of $39.00 on Wednesday. According to InvestingPro data, the stock has shown impressive momentum with a 110% return over the past year, despite recent volatility.

The research firm based its valuation on 20 times its fiscal year 2027 EBITDA estimate of $41 million, noting that Byrna’s strong margins and growth profile rank among the highest in its peer group. This assessment aligns with current performance metrics, as InvestingPro data shows the company maintaining an impressive 61.9% gross profit margin and achieving 73.6% revenue growth in the last twelve months.

The $39 price target reflects a slight discount to high-growth manufacturing peers trading at 34.5 times earnings, which Craig-Hallum attributed to less visibility in Byrna’s revenue pipeline compared to companies with recurring revenue models like Axon, Evolv, and SUN.

Craig-Hallum expects Byrna to sustain over 20% revenue growth for several years with further margin expansion due to its superior product positioning in a new and rapidly evolving market.

The firm believes this growth trajectory justifies a significant premium over legacy players in the traditional firearm market such as Smith & Wesson and Ruger, as well as other pure-play manufacturing peers.

In other recent news, Byrna Technologies Inc. reported impressive second-quarter earnings, surpassing analyst expectations. The company posted adjusted earnings of $0.10 per share, exceeding the anticipated $0.08 per share. Revenue for the quarter surged by 41% year-over-year, reaching a record $28.5 million, slightly above the consensus estimate of $28.16 million. This growth was largely driven by the successful launch of the Byrna Compact Launcher and a significant increase in dealer sales, particularly through an expanded partnership with Sportsman’s Warehouse (NASDAQ:SPWH).

Gross profit for the quarter stood at $17.6 million, maintaining a 62% margin, consistent with the previous year. Operating expenses rose to $14.2 million, attributed to higher selling expenses, payroll costs, and increased marketing efforts. The company’s cash position decreased to $13.0 million, down from $25.7 million at the end of November 2024, due to planned inventory increases for the Compact Launcher release. Byrna Technologies remains debt-free, with management optimistic about the new product’s potential to boost sales further, especially following its recent availability on Amazon (NASDAQ:AMZN).

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