Although I’m not a fan of guns, that doesn’t mean I shouldn’t cover a gun-related stock when the investment opportunity appears real. 

Years ago, I owned Sturm Ruger & Company (RGR) stock and did well by it, ultimately selling not because my conscience got the best of me, but because the ups and downs of the gun industry were too much for me to handle. 

So, when I saw that Byrna Technologies (BYRN) moved up 19 spots in Barchart’s Top 100 Stocks to Buy on Monday, into the 73rd position, I just had to check it out. 

The first thing I did was to confirm it was profitable: It is. The second was to understand what its USP (unique selling position) was. As far as I can tell, it’s an alternative product for law enforcement and personal safety best suited for outdoor conditions, as opposed to Axon Enterprise’s (AXON) Taser product line, which is more useful indoors in close quarters.  

Now, before Axon shareholders start screaming obscenities at me, it’s pretty hard to denigrate a stock that’s gained 717% over the past five years. It’s got plenty of business and support out there. My two cents won’t change that reality. 

Back to the subject at hand. 

While I’m no longer investing in defense-related stocks, that doesn’t mean you shouldn’t. Here’s why. 

Is Byrna Technologies the Next Axon?

When it comes to market capitalization, there is no comparison between the two companies. Byrna is a small cap at $619 million, while Axon is a massive business valued at $58.42 billion in equity. 

In Byrna’s latest quarterly report (Q1 2025), its sales were $26.2 million, 57% higher than a year ago, with an operating profit of $1.7 million, a big jump from a $164,000 loss in Q1 2024. 

Axon’s first quarter of 2025 saw the Taser manufacturer's sales grow by 31% to $603.6 million. However, it was unable to generate an operating profit, losing $8.8 million in Q1, down from an operating profit of $16.5 million in the same quarter a year earlier. 

At this point, without delving too deeply, I’m left wondering why Axon has a market capitalization of nearly $60 billion and is valued at 26.5 times its revenue. By comparison, Byrna trades at 6.5 times sales, with an EBITDA (earnings before interest, taxes, depreciation, and amortization) margin exceeding 10% on those sales, which is double that of Axon. 

So, if I’m a Byrna shareholder, I’m thinking, heck yes, I want it to become the next Axon, fat valuation and all. 

However, a significant amount of work needs to be done to transition from $95 million in trailing 12-month revenue (Byrna) to $2.22 billion (Axon). 

What’s the Key to Byrna’s Growth?

Axon’s key to success is that it has built a good one-two punch for revenue: Products accounted for 56% of sales in Q1 2025, while services accounted for 44%. Its annual recurring revenue, primarily driven by its services, was $1.1 billion at the end of the first quarter, representing a 34% increase from the same period last year. 

The best businesses have recurring revenue that requires less cost to acquire than one-time or infrequent sales. This explains why it is handsomely valued. It’s hard to replicate what it’s built. 

Looking at Byrna’s growth strategy, it has three levers it’s focused on to increase its revenue: Retail stores, increased “Made in America” production capacity, and celebrity endorsers and brand ambassadors. 

Byrna has opened four of its own retail stores in the Greater Nashville Area, Scottsdale, Arizona, Salem, New Hampshire, and Fort Wayne, Indiana. Direct-to-consumer allows a manufacturer like Byrna to get real-time feedback from customers and potential customers. 

While it doesn’t want to overdo it—it is a technology and innovation business selling less-lethal guns, not the other way around—a sensible rollout seems worthwhile.

At the same time, its e-commerce business is growing rapidly, accounting for 77% of sales in 2024, with the wholesale business representing the remaining 23%.

A couple of years from now, its retail stores will provide a third substantial revenue stream. That’s diversification for you. 

Of course, with growing sales must come increased production capabilities; otherwise, customers will go elsewhere. It helps if this capacity is homegrown, right here in the U.S.    

“As part of our commitment to domestic manufacturing, we’ve made significant progress with our ‘Made in America’ initiative. Today, 92% of the components used in the manufacture of our flagship SD launcher are sourced from U.S. suppliers, which is up from just 34% a few months ago,” stated CEO Bryan Ganz in its Q1 2025 press release. 

While it does want to expand internationally to Mexico and Canada, it first needs to get its capacity up to meet the needs in the domestic market. Over the past year, it has grown its capacity for launchers by 33% to 24,000. 

With that comes more overhead, but it is a necessity if it wants to continue growing. 

Lastly, it utilizes celebrity influencers such as Charlie Kirk and Donald Trump Jr. to enhance brand awareness, while also investing in marketing to educate consumers on the benefits of less-lethal safety solutions.  

The former can come back to bite you in the you-know-where should the celebrity go off the rails, but it’s a standard play by growing businesses. The latter is essential for its products to become a regular choice for gun buyers, particularly for safety purposes. 

I’ve only just started examining Byrna’s business, but it seems to be on the right track. 

I Think I Like BYRN Stock

I am the last person who would buy its stock. That said, I do like the less-lethal focus. Anything to reduce the number of unnecessary fatalities due to gun use is welcome. 

Margins are good, growth is strong, profits are increasing, and debt ($2.5 million) is minimal.

What’s not to like?

The July 18 $30 call is worth considering. The $3.40 ask is a reasonable 12.46% of the $27.29 share price. To break even, its shares must appreciate 22.39% over the next 45 days. Its shares are up 19% over the past month; it’s doable.  

The difficulty here is getting a single July 18 $30 call to buy. Yesterday, Byrna’s total volume (puts and calls of all strikes) was just 10. Its 30-day average is just 586. 

Nothing ventured, nothing gained.