Outdoor Holding Company, listed as NASDAQ:POWW, operates in the competitive firearms and ammunition industry. This sector includes notable companies such as Smith & Wesson Brands, Inc. (SWBI), Vista Outdoor Inc. (VSTO), American Outdoor Brands, Inc. (AOUT), Sturm, Ruger & Company, Inc. (RGR), and Sportsman's Warehouse Holdings, Inc. (SPWH).
Outdoor Holding Company has a Return on Invested Capital (ROIC) of -18.08%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 9.41%. This negative ROIC indicates that the company is not generating sufficient returns to cover its cost of capital, highlighting inefficiencies in its capital investments.
In comparison, Smith & Wesson Brands, Inc. has a ROIC of 3.07% and a WACC of 7.58%, resulting in a ROIC to WACC ratio of 0.41. This suggests that Smith & Wesson is generating returns that are closer to its cost of capital, indicating better financial efficiency than Outdoor Holding Company.
Vista Outdoor Inc. stands out with a ROIC of 4.84% and a WACC of 7.00%, leading to the highest ROIC to WACC ratio of 0.69 among its peers. This suggests that Vista Outdoor is the most efficient in generating returns relative to its cost of capital, indicating effective capital allocation and potential for value creation.
American Outdoor Brands, Inc. and Sportsman's Warehouse Holdings, Inc. both have negative ROICs of -2.26% and -2.64%, respectively. However, their WACC figures are lower than Outdoor Holding Company's, at 4.91% and 3.44%, respectively. This results in ROIC to WACC ratios of -0.46 and -0.77, which, while negative, are still better than Outdoor Holding Company's ratio of -1.92.
