Byrna Technologies Stock Falls 11% YTD: Is This the Right Time to Buy?

Byrna Technologies Inc. BYRN shares have declined 11% year to date, but have rallied 17% over the past month, hinting at a comeback. Its trajectory resembles other small-cap players like FuelCell Energy FCEL and Ballard Power Systems BLDP, with FuelCell Energy plunging 55% and Ballard Power Systems slipping 17% year to date.

With FuelCell Energy and Ballard Power Systems both working through their rough patches, Byrna’s rebound is catching investor attention. As FCEL, BLDP, and now BYRN show signs of life, the big question is: Does Byrna offer a real buying opportunity?

Byrna Accelerates Growth Through Endorsements and Expansion

Byrna has achieved high brand visibility through a successful celebrity endorsement program and extensive media coverage. Increased media exposure has helped normalize less-lethal solutions, significantly boosting demand from both consumers and law enforcement. This drove a notable 57% year-over-year sales growth for the first quarter of fiscal 2025, while net income improved from $17,000 in the year-ago quarter to $1.7 million.

Looking ahead, Byrna is well-positioned for growth, with several strategic initiatives. The company is ramping up production and is preparing to launch its new Compact Launcher in mid-2025. It has boosted launcher production by 33% in the fiscal quarter of fiscal 2025, reaching 24,000 units per month to meet rising market demand and drive operational expansion.

Additionally, Byrna is expanding its retail presence with more company-owned stores and strengthening its footprint in Latin America through partnerships with law enforcement.

BYRN recently extended its reach into Mexico by collaborating with Mexico’s Secretaría de Trabajo y Previsión Social to establish a federally certified training program allowing civilians to legally carry Byrna devices. Furthermore, the company is enhancing its supply chain by shifting ammunition production domestically, which is expected to improve product margins. These initiatives, alongside continued marketing investment, are anticipated to drive growth through 2025 and beyond, positioning Byrna for sustained success.

BYRN Has Strong liquidity, Great Return on Equity

Byrna’s return on equity (ROE) of 16.96% at the end of the first quarter of fiscal 2025, outperforming the industry average of 5.51%, signals stronger profitability and efficient use of shareholders' equity. These suggest that the company is generating more profit relative to each dollar of equity than its industry peers, implying effective management and an edge in capital utilization. A higher ROE generally aligns with higher shareholder returns and is indicative of the potential for continued growth, thereby enhancing investor confidence.

Byrna’s liquidity position is also strong, with a current ratio of 4 at the end of the first quarter of fiscal 2025 compared to the industry’s 1.76. Such a robust liquidity position offers financial flexibility, allowing the company to invest in growth opportunities or manage unforeseen expenses without the immediate need for additional financing. This stability reinforces investors’ confidence in BYRN’s financial health and resilience, supporting sustainable growth and potentially higher returns.

BYRN’s Promising Fundamentals

Byrna is prioritizing growth investments, which is leading to short-term pressure on profitability. However, the company remains debt-free, highly profitable, and continues to demonstrate strong revenue growth and promising market potential.

The Zacks Consensus Estimate for BYRN’s fiscal 2025 earnings is pegged at 35 cents, indicating 12.9% year-over-year growth. Earnings in fiscal 2026 are projected to increase by 41.4% year over year. The company's sales are expected to grow 30.2% in fiscal 2025 and 17.5% in fiscal 2026.

This positive outlook is reinforced by upward estimate revisions. In the past 60 days, two estimates for fiscal 2025 earnings have been revised upward, with no downward revisions. The Zacks Consensus Estimate for 2025 earnings has increased 12.9% during this period.

BYRN is a Buy

BYRN represents a compelling growth investment with its strong brand momentum and expanding market presence. The company’s strategic use of celebrity endorsements and extensive media coverage has bolstered its visibility, leading to heightened demand for its innovative, less-lethal solutions. Byrna’s focus on expanding its product lineup and strengthening partnerships both domestically and internationally showcases a forward-looking approach that aligns with market trends, positioning it well for sustained growth.

Additionally, Byrna’s strong liquidity and prudent management of resources reflect a solid foundation, allowing it to pursue growth initiatives confidently. With plans to further expand its retail footprint, enhance its supply chain, and launch new products, the company is well-prepared to capitalize on rising demand. For investors seeking a stock with high growth potential and strategic vision, Byrna stands out as a Buy, with strong indicators of continued success.

BYRN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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