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Should you invest in American Outdoor Brands Stock? Here’s A Quick Review

Should you invest in American Outdoor Brands Stock? Here’s A Quick Review

05/26/2021 11:38
finance
Dexter Cooke

Table of Contents

What is an American Outdoor Brands Stock?American Outdoor Brands Stock’s Past PerformanceAre American Outdoor Brands worth considering?Wrapping Up

Discovering where else to invest is quite a hassle. But remember that it’s not just Tesla, Nio, or Bionano that’s worth considering right now. There are stocks rising amidst the pandemic, one of which is American Outdoor Brands Stock.

If you haven’t heard of this stock yet, here’s a quick review of the brand and whether it’s a good buy or not.

What is an American Outdoor Brands Stock?

American Outdoor Brands, Inc. offers outdoor apparel and accessories both domestically and internationally for robust outdoor enthusiasts.

Hunting, fishing, hiking, shooting, personal safety, and protection items are available in the business. Its products include firearms, rests, vaults, and other associated items; premium cleats and fishing and hunting instruments; land-based management tools for hunting; harvesting of post-hunting or post-fishing products; electro-optical devices like hunting optics; firearms, flashlights, and laser grips; recharge, weapons and firearms cleaning products.

The business offers its brands under the Marksman, Defender, Harvester, and Adventure tag lanes via e-commerce and conventional distribution networks. American Outdoor Brands, Inc. was founded in 2020 and is based in Columbia, Missouri.

American Outdoor Brands Stock’s Past Performance

The latest quarterly report of American Outdoor Brand states that its net quarterly revenue amounts to $82.6 million, an improvement of $39.3 million, or 90.7%, from net sales of $43.3 million, representing growth in both e-commerce and conventional platforms.

Its gross profit was 45.2%, up from the gross margin of 44.1% in the corresponding quarter of last year by 110 basis points.

Its quarterly net gain for a comparative quarter last year amounted to $8.0 million, which means $0.56 per diluted share, contrasted with a net loss of $147,000 or ($0.01) per diluted share.

Its quarterly total non-GAAP revenue for a comparative period last year amounted to $11.8 million, or $0.82 per diluted share, as opposed to the non-GAAP net profit of $1.8 million, which was $0.13 per diluted share. GAAP and non-GAAP net income changes remove charges relating to immaterial amortization, inventory reimbursement, relocation costs, COVID-19 expenditures, and other costs.

Its quarterly Modified EBITDAS was $15.8 million, which equates to 19.1 percent of net revenue, relative to the same quarter last year as $3.4 million or 7.9 percent of net sales.

outdoor

Are American Outdoor Brands worth considering?

The American Outdoor Brands, although born during the pandemic, hasn’t experienced a major negative impact yet. In fact, the company has seen its market growing while people engage themselves in outdoor sports.

To better give you an idea of whether American Outdoor Brands is worth considering, let’s compare it to Dick’s Sporting Goods, its main competitor.

Spun off during the pandemic

The pandemic of coronavirus altered dynamism in space and, as powerful as Dick's Sporting Goods was in response to changing consumer demands, American Outdoor Brands should have been improved in terms of purchasing.

This past August 2020, American Outdoor brands was separated from gun manufacturer Smith & Wesson Brands. American Outdoor had to make a difference in the $35 billion robust outdoor sectors with about 50% of Sportsman's Warehouse's value on the market and 50% of its revenue. Though Smith & Wesson probably made an error by first and foremost diversifying into space, the move to spin it out again was a clever one.

That said that American Outdoor still faced several major barriers to entering into the industry. While it has well-known and respected labels, it is evidently a small competitor (and a very young one) in its portfolio that is taking on some stalwart industries. However, the pandemic has modified the balance.

The positive impact of Covid-19

Since physical recreation outside was one of the few things available for people during lockdowns, American Outdoor brought a good kick-start as a solo entity.

In the second quarter of the financial year, 2021 revenue increased 65% compared with the previous year, while eCommerce sales tripled and the gross margins increased by 690 basis points.

Dick's Sporting Goods, which has orders higher than American Outdoor, has seen revenue grow by 23 percent, with internet sales by 95 percent.

A flourishing market for outdoor sports

Dick's decision to leave much of the weapons and shooting market was stronger after initial turbulence, but that is the common section of the rough outdoors.

"We assume we are experiencing a new fundamental level of customer engagement in outdoor activities and the interest in personal safety, and in adjacent hobbies around outdoor adventure, which provide significant, long-term growth opportunities for our company beyond 2020," said American Outdoor's CEO while reporting its profits.

They are not just weapons that fuel revenues, they are devices like hiking, hunting, and fishing equipment since all these are really interlinked. American Outdoor quoted figures that 50% of campers first camp in 2020. It also referred to figures indicating that this year there might be 1 million more hunters and the millions of new owners of arms who entered the sport.

Growth opportunities

Compared to Sporting Goods, it seems like American Outdoor Brands has more room for growth than Sporting Goods. Considering that the latter joined the market earlier than America Outdoor, it’s common to observe an increase in sales driven by people’s interest in outdoor sports during the pandemic.

Now American Outdoor Brands has an opportunity to build on the new commitment by customers to the great outdoors. Since it’s new, people are inclined to try out what it has to offer considering that it was crafted by the people behind the famous gun company. Clearly, growth opportunities are there for this new brand, and if this is not something to consider when you invest, what else is it?

Wrapping Up

In the meantime, American Outdoor Brands look pretty fine on their own. The company has seen robust income estimates in the past month for review activities, showing that investors are gaining some new momentum with regard to both the short and long-term outlook of the company.

Indeed, the current quarter projections increased from 17 cents a share to 28 cents a share during the last month, while the current year projections have increased from 93 cents a share to 1.67 dollars a share. This helped AOUT gain a Zacks Rank # 1 (Strong Buy) that further emphasized the strong position of the firm.

So, think American Outdoor Brands if you're searching for a good option in a strong industry. Not only is the sector already in the top-third, but it also has strong estimates of late revisions, meaning that an investor looking for a brand in this large industry segment will find it quite important.

Dexter Cooke | He is an orthopedic surgeon who insists that a physician's first priority should be patient care. He specializes in minimally invasive complete knee replacement surgery and laparoscopic procedures that reduce pain and recovery time. He graduated from the Medical University of South Carolina with a medical degree and a postdoctoral fellowship in orthopedic medicine.

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