Small-cap stocks can be volatile, especially after an IPO, often swinging wildly before finding their footing. But sometimes, steep declines create a compelling entry point. That may be the case with GrabAGun Digital Holdings (PEW), a newly public online retailer specializing in firearms, ammunition, and related accessories.

The company operates GrabAGun.com, an e-commerce platform that offers a wide selection of shooting sports products, from handguns and rifles to optics, gear, and hunting equipment. 

Since its debut just last month, PEW has plunged nearly 40%, shaking investor confidence. Yet, in a rare and bold move for a fresh IPO, the company announced a $20 million stock buyback program, signaling that management sees serious upside in its current valuation. Plus the company is slated to report earnings on Aug. 14 and with $120 million in cash on hand, leadership appears convinced the market is mispricing its long-term potential.

For investors looking for a high-risk, high-reward opportunity under $10, PEW may be worth a closer look.

The $20 Million Buyback Plan

A few days ago, GrabAGun’s board announced a buyback program authorizing up to $20 million of stock repurchases over the next year. Management stressed that the move reflects confidence. CEO Marc Nemati said the board believes the current share price is “significantly below the Company’s intrinsic value,” and called buying back shares “a compelling and efficient use of capital” at these levels. The program is meant to bolster investor sentiment and boost per-share metrics. Notably, the company reported ending Q2 with over $120 million in cash, no debt, and positive earnings.

In a press release, GrabAGun highlighted that it still delivered revenue growth in Q2 despite industry headwinds, suggesting management feels the buyback is justified by a strong balance sheet and ongoing expansion. In short, the $20 million buyback is a defensive signal. The company is deploying cash to support the stock and underscore its belief that the shares are undervalued.

Key Expectations for the Upcoming Earnings Report

GrabAGun will release its Q2 2025 results after the market closes on Aug. 14. Investors will focus on whether revenue continues to grow beyond the $93.1 million reported in 2024, especially given management’s hints of expansion.

Profitability is also in the spotlight, with analysts looking for positive earnings or at least a break-even performance, especially considering the company’s $120 million cash reserve and zero debt. Gross margins and net income figures will be crucial in assessing operational efficiency.

 Additionally, clarity on customer growth, inventory trends, and any updates on cash flow will help determine how sustainable current operations are. Investors will also look for commentary on market demand, competitive pressures, and regulatory developments in the firearms sector. 

With little historical public data, the earnings call may heavily shape sentiment. Importantly, shareholders want assurance that the $20 million buyback won’t jeopardize the company’s ability to fund growth initiatives or navigate market risks.

Should You Buy PEW Under $10?

PEW’s $20 million buyback and cash-rich balance sheet suggest value, but the 40% post-IPO drop signals market doubts. While management sees the stock as undervalued and holds brand partnerships with Glock and Smith & Wesson (SWBI), modest revenue growth and industry volatility raise concerns. Risk-tolerant investors might find potential here, but others may want to wait for GrabAGun’s Aug. 14 earnings to confirm a rebound story.