GrabAGun Digital (NYSE: PEW)

Pay less than nothing for a market share gainer with multi-bagger optionality

TLDR

• PEW trades at a 20% discount to the cash on its balance sheet

• The core business outgrows its industry 15% a year on average, and is break-even on its way to profitability

• It has a new business line that’s very high margin and could make it a multi-bagger

Pitch

I have a simple but interesting little pitch, very deep value (sorry not a semiconductor bottleneck). Company is GrabAGun.com, they’re an online retailer of firearms, munitions and accessories. It trades on the NYSE under the ticker PEW.

The business was launched in 2010 by 4 partners led by the current Founder & CEO Marc Nemati. He was an e-commerce developer for IBM, he saw an opportunity in e-commerce for firearms.

The firearm market has been slower to penetrate online sales, with high regulatory barriers and poor tech adoption. Him and his team proceeded to build a big tech stack from supply chain management to UI, dynamic pricing, inventory management and all the logistics behind delivering guns to people. Selling guns online is not easy, it requires a lot of regulatory hurdles to overcome.

It came public via SPAC in 2025, it had explosive returns out the gate due to the involvement of Donald Trump Jr on the board. Then the hype slowly faded and the stock got killed every day with the market treating it as a “meme stock” of some kind. Add to that a very rough downturn post COVID in firearm sales, see below FBI background check data, essentially gun sales skyrocketed during COVID and we’re 5 years deep into this hungover.

FBI background checks as proxy for gun sales data

FBI background checks are often used as a proxy for gun sales since every sale comes with a check. It’s not perfect however and some companies use adjusted checks to adjust out non-sales, but it’s a reasonable good proxy.

Those background checks (think gun sales) saw a 37% decline peak to trough.

It’s been completely forgotten and abandoned despite good fundamentals.

1 – PEW trades below the value of its cash on balance sheet

PEW today trades at $2.95 per share, but the net cash on their balance sheet amounts to $3.51 per share, all non-restricted.

Even if you assume the entire GrabAGun business is worthless the stock still has about 20% upside.

Now obviously the big question is will they burn through all of it?

PEW is EBITDA breakeven and slightly FCF positive, so no natural cash burn there, and is on a path to real profitability.

Capital allocation wise I think a lot of people fear its historical goal of being a roll-up of the firearms e-commerce space. This was the goal when they came public at a valuation of $600M. Today however they’re trading below cash, the math to make an accretive deal is a lot more difficult, and management has been very disciplined, doing 0 acquisitions since being public to avoid over-paying.

This from the Q4 25 call, it’s an encouraging comment from the CEO:

“On the M&A front, our pipeline remains active and our priority remains focused on disciplined accretive opportunities that strengthen and complement our platform. We are seeing is a disconnect between seller price expectations and fundamental value. Private market valuations in our space continue to reflect aspirational more than reality. We have no interest in bridging that gap at our shareholders expense. Every potential acquisition is evaluated against a straightforward standard. Does it bring a creative revenue and income and does it strengthen the ecosystem that we are trying to build? If the answer is not clearly yes, we walk away. The discipline is not a sign of inactivity, it’s our job.” - Marc Nemati, CEO

A good sign is the company launching a $20M buyback which they’ve executed half of already. I also had a discussion with management on this that made me feel relatively good that they were going to be disciplined and that they treat this business as their own.

After all, the CEO is the largest shareholder with 2.6M shares (9% ownership) and insiders as a whole own over 35% of the company.

2 – Grabagun.com is a structural share gainer

Ok so the stock trades below cash on the balance sheet, and I don’t think they’ll incinerate it. What is the actual business and is it exciting?

GrabAGun is a secular share gainer in firearms sales, they have a better tech stack than most other e-commerce players, especially on mobile where they have the highest rate of mobile users of anyone (70%+ of traffic). They’re particularly good at appealing to the younger generation of gun buyers.

The most used proxy for firearms sales is the FBI background check data that I showed earlier, here’s how GrabAGun’s been doing:

• FY2025: Industry -10.6% YoY, PEW +3.6% -> 14.2% outgrowth

• Q4 25: Industry -3.7% YoY, PEW +11.5% -> 15.2% outgrowth

  • This is volume only, it’s ex price unlike FY25, so the outgrowth on revenue is actually even higher

• Historically it’s always been around mid-teens growth over market

It’s worth highlighting that industry firearm sales seem to have troughed after 5 years of downcycle, a huge positive for PEW. Let’s look at the progression of the FBI background check data again:

Now bear in mind that PEW management like others use adjusted checks which can adjust out non-sales. I don’t have access to this data, but while there can be a couple points of delta, the direction is similar.

If the industry returns to flat to up slightly, PEW can keep growing revenue 15%+ organically. Not bad for a business you’re getting for free.

In 2025 GrabAGun operated at a slight loss of EBITDA, but it’s worth highlighting that before adding on a bunch of public company costs it was profitable generating $4.5M of EBITDA a year. I expect that to return with operating leverage; the tech platform is built so every dollar of sales flows through to the bottom line very nicely.

I believe GrabAGun will grow from $100M to $150M in the next 3-ish years, and that around mid-single digit EBITDA margins is a reasonable target so say $7-8M of EBITDA.

3 – The massive optionality of PEW Logistics

This is where it gets even more exciting. Ok you’re buying GrabAGun, a category leader outgrowing its industry by 15%, it’s inflecting to profitability, and you’re paying less than the cash on its balance sheet. But it gets better.

In late 2025 PEW revealed a new offering, PEW Logistics. The thinking was this, they built this great complex infrastructure around online sales, handling logistics, dealing with the delivery of firearms (you can’t just ship them to people’s doors), supply chain management, etc.

This entire infrastructure is used by GrabAGun.com, which means high fixed costs and lots of scalability. So what could be extremely accretive? Getting more sales volumes through the platform. How can you achieve that? Selling this infrastructure to 3^rd parties.

PEW logistics’ bet is to allow gun manufacturers, think Smith & Wesson or Ruger, to go direct to consumer. It’s been something the manufacturers have thought about for years.

Today a gun manufacturer makes 20-30% gross margins for a branded product, very low by any industry standard. The reason why is because they’re sacrificing 20-30pts of gross margins to both a wholesaler, and then a firearms dealer. If they could go direct to consumer, their gross margins would all of a sudden go to 70%.

PEW Logistics’ pitch is, give me part of your volumes, I’ll build you a private label website with your name on it, I’ll handle all the regulatory details, the warehousing, fulfillment, delivery at a dealer, etc, but in exchange pay me a handling fee + a revenue share.

This could be a game changer. We’re talking about a business with software like margins, 70-80%, with very high incrementals because it’s using infrastructure that’s already built for GrabAGun.com.

The product is brand new, it’s only been live for 3 months but it’s already gotten two OEMs: Keltec in January 2026 and Derya Arms in March 2026. Keltec is a growing American manufacturer with about 300 employees, sort of a mid-sized player, and Derya is a large Turkish manufacturer with meaningful exports to the US, only number I could find is around 400k units of annual production capacity.

Now this won’t be easy, you need to convince the big guys, and while it’s a good pitch since it’s a literal 3x of the manufacturers’ margins, the gun industry tends to be slow to move and there could be pushback from dealers.

But here’s why the potential is crazy. Unlike GrabAGun.com which remains fairly low margins, this has extremely high incremental margins.

Civilian firearm sales in the US are around $9bn, or 15M units. Say they get to 3-4% penetration, that’d be around $300M of gross revenue, based on their likely revenue share in the low 10%, that’d be $30M of revenue.

This $30M revenue comes in at say 70% gross margins with virtually no SG&A given that the platform has already been built for GrabAGun. This means as much as $20M of incremental EBITDA for a business generating $0M right now, say $15M to give an SG&A buffer.

This is what gives it multi-bagger potential, and while it’s early days, management is clearly taking it seriously having signed two customers and having added a new warehouse for it.

Conclusion and valuation

Today you’re buying $3.5 a share of cash + a structurally growing business + very meaningful optionality in PEW logistics for $2.95.

PEW Logistics is the most uncertain, your downside is very well protected, your upside is solid with GrabAGun but explosive with PEW Logistics, the likelihood of success tho is a big unknown, so I give it what I think is a very reasonable valuation but reduce the value by a % chance of success.

In reality, if PEW Logistics works, it won’t stop at $15M of EBITDA, it’ll be much more and deserve a much bigger multiple, but it’s a way for me to add conservatism given how uncertain it is.

It’s essentially a deep value stock, with a real growing business attached to it, and a call option in PEW logistics that could make it a multi-bagger.

Disclaimer: I own shares in GrabAGun. I may buy or sell at any moment without disclosing it. This is not financial advice this is for entertainment purposes only.