Outdoor Holding Company, listed as NASDAQ:POWW, operates in the ammunition and outdoor products industry, previously known as AMMO, Inc. The company focuses on manufacturing and selling ammunition and related products, competing with entities like Smith & Wesson Brands, Inc., Vista Outdoor Inc., American Outdoor Brands, Inc., Sturm, Ruger & Company, Inc., and Sportsman's Warehouse Holdings, Inc.
In evaluating Outdoor Holding Company, the Return on Invested Capital (ROIC) is a critical metric. The company has a ROIC of -18.08%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 9.34%. This negative ROIC indicates that the company is not generating enough returns to cover its cost of capital, as shown by its ROIC to WACC ratio of -1.93.
Comparatively, Smith & Wesson Brands, Inc. has a ROIC of 3.07% and a WACC of 7.53%, resulting in a ROIC to WACC ratio of 0.41. This suggests that Smith & Wesson is more effective in generating returns on its invested capital compared to Outdoor Holding Company. Similarly, Vista Outdoor Inc. has a ROIC of 4.84% and a WACC of 7.00%, with a ROIC to WACC ratio of 0.69, making it the most efficient among the peers.
American Outdoor Brands, Inc. and Sportsman's Warehouse Holdings, Inc. also have negative ROIC to WACC ratios of -0.47 and -0.78, respectively. However, their negative ratios are less severe than Outdoor Holding Company's -1.93. Sturm, Ruger & Company, Inc. has a positive ROIC to WACC ratio of 0.15, indicating some level of efficiency in generating returns above its cost of capital.
