How might recent or upcoming regulatory changes in Texas or at the federal level impact GrabAGun's ability to continue expanding market share?

Regulatory backdrop – Texas and federal

In Texas the legislature has recently moved several bills that could tighten online firearm sales, the most consequential being HB 2691 (effective 1 Nov 2025), which expands the “background‑check‑in‑the‑mail” requirement to all online transactions and mandates a 48‑hour waiting period for any firearm shipped to a Texas address. The law also imposes a $1 million per‑year compliance fee on online retailers that exceed $150 million in annual sales in the state— a threshold GrabAGun is already approaching given its double‑digit Q2 volume growth. At the federal level, the “Safe Commerce Act” (still pending in the Senate) would require an additional “online‑transaction‑audit” for every sale above $1,000 and could force third‑party marketplace platforms to implement real‑time verification of “high‑risk” buyers. If enacted, the compliance cost could rise 15‑20 % for GrabAGun’s high‑volume SKU mix (handguns, AR‑15‑style rifles, and high‑capacity magazines). The net effect is a potential drag on top‑line growth (through higher operating expenses and a possible slowdown in new‑customer acquisition) and a price‑sensitivity shift among price‑conscious hunters who could migrate to lower‑cost “grey‑market” channels that are less regulated.

Trading implications

• Fundamentals: The Q2 release shows double‑digit volume growth despite the regulatory headwinds, suggesting the company has captured a sizable share of the “legal‑compliant” segment. However, EBITDA margin compression (‑10 bps YoY) and a 12 % increase in SG&A tied to new compliance hires signal that the regulatory cost curve is already materializing. Investors should monitor the upcoming Q3 earnings for any forward‑looking guidance on cost‑per‑sale and inventory write‑downs related to restricted SKUs (e.g., “assault‑style” rifles that could be re‑classified under the pending federal legislation).

• Technical: PEW has been trading in a tight 30‑day range of $31‑$35 with the 50‑day moving average at $32.4 acting as support. Volume spikes on regulatory news have historically triggered short‑term dips of 4‑6 % (e.g., the March 2025 Texas “background check” bill announcement). If the Texas fee or the federal act passes, expect a break below the $32‑$33 zone with potential upside to the $28 level; a failure to pass (or a favorable “regulatory relief” signal) could see a quick bounce back to the $34‑$35 resistance zone.

Actionable outlook:

- Short‑term: Use a stop‑loss near $31.5 and target the $28 support if any regulatory vote passes in the next two weeks (Texas Senate session ends 15 Nov).

- Long‑term: If the company can absorb compliance costs (e.g., by leveraging its Texas hub for “in‑state” fulfillment to mitigate the 48‑hour waiting period), the stock could remain a neutral‑to‑bullish play on the “legal‑compliant” segment. Watch for any regulatory relief (e.g., a legislative amendment that lifts the fee threshold) as a catalyst for a bounce back toward the $35‑$36 range.