Shares of Ammo (POWW 0.78%) jumped 10% higher at the open on Thursday and were up more than 5% in afternoon trading after the ammunition manufacturer raised its full fiscal year guidance.
Ammo has taken shareholders on a turbulent ride so far in 2021, with the shares up nearly 200% for the year in mid-February only to come back down to earth some in March. The company last month sold stock into that rally, raising some added cash, and on Thursday morning it provided an optimistic outlook for the remainder of its fiscal year.
In a statement, Ammo said it expects to generate $24 million in revenue during its fiscal fourth quarter, up from previous guidance of $20 million. That total would be a 400% increase compared with the $4.8 million in sales recorded in the same quarter last year.
For the full fiscal year, Ammo expects $62 million in revenue. That would be a 319% increase compared with its $14.8 million in revenue last year.
"The fourth quarter was our strongest quarter ever," CEO Fred Wagenhals said. "Ammo anticipates domestic commercial demand to remain robust through the upcoming year, with anticipated military, import and export orders serving as additional growth drivers."
Ammo has come a long way in a short amount of time. The company has a market capitalization just shy of $600 million today, up substantially from about $150 million last December. That's a very robust nine times its expected full-year sales.
The only way to justify that sort of valuation is continued rapid growth. Ammo's update is a reminder of how well the company has done over the last year. Investors are buying in on Thursday on anticipation Wagenhals is correct and the strong performance can continue in the quarters ahead.