A recent Gallup survey revealed that American perceptions of crime rates in their neighborhoods are the highest in five decades. Meanwhile, Americans’ dissatisfaction with U.S. gun laws has risen to 63%, up 7% from last year. The combination of these two trends has given rise to a critical need for non-lethal defense that Byrna Technologies (NASDAQ:BYRN) seems well-positioned to address.
The stock is up over 100% YTD and shows signs of hitting higher levels of growth. As such, BYRN is an intriguing investment opportunity, particularly for investors looking for a play in the non-lethal defense industry.
A Non-Lethal Alternative
Byrna Technologies designs and produces innovative, less-lethal personal security devices. Its products are legal in all 50 U.S. states and Canada.
The company has a presence 30 countries around the globe, with significant business in Indonesia, Argentina, and South Africa. It has recently secured a significant deal to supply 10,000 Byrna launchers to Córdoba Provincial Police in Argentina, greatly expanding the company’s South American footprint.
Byrna’s recent success has been fueled by a marked pivot in the company’s advertising strategy utilizing celebrity endorsers, which launched in September 2023. This strategy has directly led to an additional $6.7 million in direct-to-customer revenue via their website and Amazon compared to the previous year.
The company believes its total addressable market is roughly $92 billion among U.S. consumers, comprising both gun owners and non-gun owners. Byrna’s goal is to gain a 5% market share of non-gun owners and 10% of gun owners, which they believe represents a $6 billion opportunity.
Byrna’s Recent Financials & Outlook
Byrna Technologies reported a substantial increase in its revenue for Q1 2024. The company reported net revenue of $16.7 million, beating the consensus estimate of $15.64 million and showing a significant jump from $8.4 million recorded in the same quarter of the previous year.
The company’s net income for Q1 2024 also improved considerably, coming in at $17,000, a marked difference from a loss of approximately -$2.2 million in Q1 2023.
The company is assessing the potential for a Byrna franchise program across the U.S. and Canada. Initial work suggests North American demand would support more than 400 dedicated Byrna retail stores.
What is the Price Target for BYRN?
The stock has been trending, climbing roughly 125% over the past year. It trades at the higher end of its 52-week price range of $2.19-$15.34. However, with the extended price climb, the stock now trades at a premium on a relative basis. For instance, its P/S ratio of 5.6x sits above the Industrials sector average of 1.3x and the Aerospace & Defense industry average of 1.8x.
Analysts following the company have been bullish on the stock. Ladenburg analyst Jon Hickman recently increased Byrna Technologies’ price target from $12.75 to $16.25 and reiterated a Buy rating. He cited Byrna’s growing prominence in the non-lethal personal security market and expects a substantial revenue increase in the forthcoming years.
Byrna Technologies is rated a Moderate Buy based on the 12-month price targets and recommendations of two Wall Street analysts issued in the past three months. The average price target for BYRN stock is $16.63, which represents a 29.92% upside from current levels.
Bottom Line on BYRN
Byrna Technologies has emerged as a potent player in the non-lethal defense industry. The company’s recent financials bear testimony to its consistent growth, with its net revenue almost doubling year-over-year. While the stock is trading at a relative premium, likely already reflecting expectations of further growth, the BYRN could still offer nearly 30% upside. The company could be an appealing investment opportunity for those seeking a defense stock with long-term growth potential.
