$0.00
$3.39
bear $0.00
base $0.82
bull $3.39
margin of safety $0.40
market price* $4.84
Byrna Technologies makes and sells CO2-powered less-lethal personal security launchers (the Byrna SD, LE and CL), along with projectiles, CO2 cartridges, accessories and the Byrna Shield backpack, sold online, through Amazon, through dealers and chain retailers such as Sportsman's Warehouse, and in a handful of company stores. Its fiscal year ends November 30. In August 2026 it bought the assets of HERO Defense Systems for about $1.7M to add further price points. WHAT CHANGED SINCE OUR LAST LOOK. Our previous analysis was written after a weak second quarter, when we could not tell whether the 42.5% revenue drop was a one-off. The third quarter answered that: revenue was $15.3M against $28.2M a year earlier (down 46%), which the company attributes to weaker e-commerce sales and slower reorders from dealers and chains after they restocked in the first quarter. Two consecutive quarters of that size are a run rate, not a blip, so we now build the near term on losses rather than on a recovery. Offsetting news is real but smaller: moving ammunition production to an outside supplier lifted gross margin (64.5% in the third quarter excluding a one-time $2.3M tariff refund, versus 60.1% a year earlier), and inventory has begun to come down slowly ($30.0M at August 31 versus $32.7M at November 30, 2025). Cash and securities fell to $9.4M from $10.4M at May 31, partly because the company spent about $1M buying back stock. THE RECORD. Revenue: $16.6M (2020), $42.2M (2021), $48.0M (2022), $42.6M (2023), $85.8M (2024), $118.1M (2025), and $60.7M for the first nine months of 2026 versus $82.9M a year earlier. Owner earnings per share (cash from operations, less working-capital swings, stock compensation and maintenance capital spending) were negative every year from 2016 through 2023 (between -$0.17 and -$0.42), then +$0.35 in 2024 and +$0.40 in 2025. The median since the launcher business began in 2020 is a loss of about $0.22 a share. Only the two highest-revenue years made money. On our measure the first nine months of 2026 lost about $1.1M even with $3.3M of one-time tariff refunds, so about $4.4M underlying, and the third quarter alone lost about $3.5M from operations before the refund and $1.7M of one-off costs. COST STRUCTURE. Recurring operating costs ran about $13.4M a quarter in the third quarter, much of it marketing and staff that does not shrink with sales. At today's gross margin the business needs roughly $80M to $90M of yearly revenue to break even; it earned money only above that level in 2024 and 2025 and lost $6M to $9M a year when sales sat near $45M in 2022 and 2023. ACCOUNTING JUDGEMENTS. The 2026 results include $4.5M of equipment impairment and $6.0M of inventory write-downs, mainly from ending in-house ammunition production. These are added back by our method as non-cash, but they are a real loss of money already spent, which is why we do not credit the full inventory balance as cash in any case. The tariff refunds are one-time and are excluded from the earning level. 2025's profit depended on setting aside a $20.3M build in inventory and receivables; that inventory is only now being worked down. Stock compensation (about $2.6M a year) is treated as a real cost. DEBT. No borrowings are outstanding. The $5M revolving line is undrawn, and the $15M delayed-draw term loan can only fund acquisitions. We give the facility no value and assume no borrowing. A $0.45M contingent payment for HERO is deducted. BASE CASE ($0.82 per share). Revenue settles in the $70M-$80M range, roughly the 2024 level, which the company has already reached, and 2026 itself will land near it given $60.7M in the first nine months and a seasonally strong fourth quarter. Owner earnings are a loss of about $3M in year one (in line with the underlying nine-month result), about -$1M in year two as the severance and outsourcing already underway take effect, then about +$1M a year for the following 13 years (thin earnings near break-even at the improved gross margin, supported by repeat projectile and CO2 sales to the installed base). Nothing is credited beyond year 15. Inventory falls to about eight months of cost of goods (about $19M), releasing about $10.7M over three years. Business worth: about $13.7M (earnings $4.2M, inventory release $9.5M). Owes: nothing borrowed; the $0.45M acquisition payment is deducted. Excess cash beyond $4M of working cash, plus a $0.6M loan receivable from the Latin America licensee, adds $6.0M. Shareholders' value: about $19.3M, or $0.82 a share on 23.4M shares. The base sits above the long-run median loss because the gross margin is now structurally higher; it credits no growth, no new products from HERO, no international expansion and no benefit from the new influencer campaigns, none of which has yet produced evidenced earnings. BEAR CASE ($0.00 per share). Revenue falls back to roughly the 2023 level of about $45M, as it did after the 2021 surge faded, and stays there. Owner earnings lose about $7.6M a year for three years, the average of the actual 2022 and 2023 losses, with no earnings credited afterward. About $12M of inventory is turned into cash and the rest is written off. Business worth: about -$9.6M (losses of -$20.3M offset by $10.7M of inventory conversion). Owes: nothing borrowed, plus the $0.45M acquisition payment. All $9.4M of cash and the $0.6M loan receivable are consumed. Shareholders are left with roughly nothing, and in practice a dilutive equity raise or a sale of the brand would be needed by year three. The bank line's covenants could restrict borrowing in exactly this situation. BULL CASE ($3.39 per share). Revenue returns to about $100M, close to the last twelve months ($95.9M) and below the 2025 peak, at the 2024-2025 level of owner earnings, about $8M a year, from year two onward after a break-even year one, held for 15 years. The levers are already in place: the dealer and Sportsman's Warehouse relationships are signed, the higher gross margin from outsourced ammunition is demonstrated, and the company has twice before rebuilt revenue after a slump. Business worth: about $73.8M, plus $3.6M of inventory release. Owes: nothing borrowed, less the $0.45M acquisition payment, plus $6.0M of excess cash and loan receivable. Shareholders' value: about $79.3M, or $3.39 a share. WHAT WOULD MAKE THIS WRONG. If the fourth quarter does not show the seasonal lift the company expects and revenue stays near the third quarter's $61M annual pace, losses would run around $10M a year at the current cost base and the shares move toward the bear case. If the new marketing push restores revenue toward $100M, results move toward the bull case. Further inventory write-downs would cut the inventory release we credit. Estimates in our previous analysis (bear $0.03, base $1.24, bull $4.52) assumed the second quarter might prove temporary; the third quarter shows it did not. MARGIN OF SAFETY PRICE ($0.40). We are not confident in the earnings level: eight of the last ten years lost money, the two profitable years required peak revenue, and the last two quarters show how quickly that reverses. The worst plausible outcome is revenue stuck near $45M, $7M-$8M yearly losses, more inventory write-downs and a dilutive equity raise at a low price. With no debt and $9.4M of cash and securities the company can survive about two to three years of that, but not indefinitely. If we are wrong about where revenue settles (at $60M instead of $75M the business loses roughly $10M a year) or about how much of the $30M inventory is really saleable, the shares are worth well below the base case. The price assumes a holding period of three to five years, and the company pays no dividend in the meantime. The margin-of-safety price of $0.40 a share equals roughly the cash and securities on the balance sheet ($9.4M, or $0.40 a share), with nothing assigned to the inventory ($1.28 a share at cost), the brand or the retail network. From that price, a poor outcome implies most of the price is recovered, and a middle outcome, mainly through inventory turning into cash over three years, implies more than 20% a year.