Sturm, Ruger & Company: Investing Through The Long Term Has Proven Unprofitable

Sturm, Ruger & Company (RGR), a leader in American-made firearms, has long been a symbol of resilience in the volatile firearms industry. Yet, despite its historical reputation, long-term investors in RGR’s stock have faced a paradox: a 15-year total return of +287% masks a deeply uneven journey, with recent years eroding gains and leaving many portfolios bruised. This analysis dissects the company’s stock performance, key drivers, and the risks that have made long-term investing in RGR a rollercoaster ride—ultimately arguing that its volatility and regulatory headwinds now outweigh its long-term appeal.

A Stock of Peaks and Valleys

RGR’s stock embarked on a meteoric rise from $8.49 in 2010 to a staggering $73.88 all-time high in June 2021, fueled by soaring demand during the pandemic and a surge in firearm purchases. Yet, since that peak, the stock has plummeted 52%, closing at just $35.00 by May 2025. While the 15-year total return of +287% (CAGR of 9.22%) may seem impressive, the reality is far more nuanced:

The Downward Spiral Since 2021

The post-pandemic period has been disastrous for RGR investors. After hitting $73.88 in 2021, the stock shed 34% by 2022 and another 8% in 2023. The final blow came in 2024, with a 20.91% drop to $35.16—a 15-year low. By 2025, the stock languished near $35, down 0.45% year-to-date. These losses reflect a perfect storm of factors:

1. Regulatory Pressures: Ongoing debates over gun control, including federal and state legislative efforts to restrict firearm access, have dampened demand.
2. Economic Uncertainty: A slowing economy and rising interest rates have reduced discretionary spending on firearms.
3. Competitor Underperformance: RGR’s struggles mirror broader sector weakness. Competitors like Smith & Wesson (SWBI) and even non-firearm peers like Peloton (PTON) saw similar declines, highlighting industry-wide headwinds.

The Math of Unprofitability

While RGR’s 15-year gains are undeniable, they require an investor to have held through its most volatile periods—including a 51% crash in 2014, a 10% dip in 2019, and the recent freefall. For those who missed the 2021 peak or entered later, the numbers are grim:
- 5-Year Return (2021–2025): -21.39% (CAGR of -1.58%).
- 3-Year Return (2023–2025): -37.62% (CAGR of -15.69%).

Even dividends—$0.24 per share in 2024 and $0.18 in Q1 2025—cannot offset these losses. A $73.88 investment in 2021 would now be worth just $57.70, a 21.8% loss in real terms.

Fundamental Drivers and Risks

RGR’s strength has always been its focus on innovation and quality, exemplified by products like the 10/22 rifle and the Ruger Precision Rifle. However, its reliance on a politically charged industry leaves it vulnerable to external shocks. While the company’s U.S.-based manufacturing and niche market position are advantages, they cannot insulate it from regulatory shifts or economic downturns.

Conclusion: A Volatile Legacy, Not a Safe Bet

Despite its 15-year gains, RGR’s stock has become a cautionary tale for long-term investors. While the compound annual growth rate of 9.22% over 15 years suggests profitability, the reality is that volatility and recent declines have made sustained holding risky. For those who entered post-2021, losses are steep, and the current price near $35—a 52-week low—offers little comfort.

The data is clear:
- Total Return Since 2021: -21.39% (vs. +287% since 2010).
- 2024–2025 YTD Performance: -21.71% CAGR.

In an era of regulatory uncertainty and economic fragility, RGR’s stock no longer offers the stability needed for long-term growth. Investors are better served seeking sectors with clearer tailwinds—or at least less exposure to political and economic whiplash.

In short, Sturm, Ruger’s journey underscores a truth: even companies with strong fundamentals can falter when macro risks collide. For now, the long-term prognosis for RGR’s shareholders remains shaky—and unprofitable.