Ammo Inc. Up 100% Since December Call: Could More Growth Be Coming?

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Gun stocks and ammunition stocks have been hot heading into 2021 as a new administration is set to take office.

What Happened: Recently uplisted Ammo Inc. POWW is seeing the benefits of demand for ammunition.

The stock was highlighted on a December Benzinga show as a play on the uplisting and the strong backlog.

On Tuesday, the company announced updated guidance for the fourth quarter. The company sees fourth-quarter revenue of approximately $20 million, which would be a year-over-year increase of an estimated 317%. New fiscal 2021 guidance calls for revenue to hit $58.2 million, a 293% year-over-year increase.

The company had already raised third-quarter guidance with a new forecast of $16.5 million in revenue, year-over-year growth of 489%.

Third-quarter earnings will be reported on or before Feb. 15, the company said.

Related Link: Stocks That Hit 52-Week Highs On Wednesday

Growth Ahead: Ammo Inc. is building a new $12 million manufacturing plant in Wisconsin. The plant will triple the company’s manufacturing footprint in Wisconsin and meet the company’s key growth objective of ramping up supply in the heart of the U.S. The new plant is scheduled to open by summer 2022.

Ammunition sales are forecasted to grow from $20.8 billion in 2020 to $24.9 billion in 2025 for the U.S. market.

“The company expects market demand to continue to increase given the recent outcome of the U.S. Senate elections in Georgia, the resulting political uncertainty and impact upon the ammunition and gun industry,” said Ammo CEO Fred Wagenhals.

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Benzinga’s Take: Despite the 100% increase since the December recommendation, Ammo Inc. looks well-positioned to capitalize on several trends.

The demand for ammunition, the new administration and political uncertainty all play into the company’s favor.

The uplisting by the company adds potential retail investors that could not previously own the stock. The new manufacturing facility could improve the growth prospects for the future of the company.

POWW Price Action: Shares of Ammo Inc. were up 34% to $7.28 on Wednesday and hit new highs of $8.98 earlier in the day. Shares are up over 300% in the last year.

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