American firearm manufacturing company Ruger (NYSE:RGR) missed analysts' expectations in Q1 CY2024, with revenue down 8.5% year on year to $136.8 million. It made a GAAP profit of $0.40 per share, down from its profit of $0.81 per share in the same quarter last year.

Is now the time to buy Ruger? Find out by accessing our full research report, it's free.

Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.

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Sales Growth

A company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one may grow for years. Ruger's annualized revenue growth rate of 2.1% over the last five years was weak for a consumer discretionary business. Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. Ruger's recent history shows a reversal from its already weak five-year trend as its revenue has shown annualized declines of 13.7% over the last two years.

This quarter, Ruger missed Wall Street's estimates and reported a rather uninspiring 8.5% year-on-year revenue decline, generating $136.8 million of revenue.

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Cash Is King

If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.

Over the last two years, Ruger has shown mediocre cash profitability, putting it in a pinch as it gives the company limited opportunities to reinvest, pay down debt, or return capital to shareholders. Its free cash flow margin has averaged 5.9%, subpar for a consumer discretionary business.

Ruger's free cash flow came in at $5.56 million in Q1, equivalent to a 4.1% margin and up 53% year on year.

Key Takeaways from Ruger's Q1 Results

We struggled to find many strong positives in these results. Its revenue, operating margin, and EPS fell short of Wall Street's estimates. Overall, this was a bad quarter for Ruger. The company is down 4.6% on the results and currently trades at $44.21 per share.

Ruger may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.