PRAGUE—For Czech gun maker CZG-Ceska Zbrojovka Group, its recent acquisition of the Colt brand carries both the potential to become a major player in the global firearms market and the challenge of reviving the fortunes of a fabled U.S. name. Shares of CZG, which listed on the stock market last October, have surged 60 percent in Prague this year as investors welcomed solid revenue growth and the company’s $222 million purchase of privately-held Colt Holding Company—a deal finalised in May that will make CZG a competitor for U.S. leaders such as Smith & Wesson and Sturm, Ruger & Company. Colt, with plants in the United States and Canada, will give CZG the capacity to expand production beyond its main factory in the Czech Republic and allow it to compete in U.S. military contracts because it will fulfil “Buy America” regulations requiring U.S. production. CZG says it aims to almost double …