Axon Enterprise (AXON) AI Stock Analysis

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Axon Enterprise

(NASDAQ:AXON)

76Outperform

Axon Enterprise scores a solid 76, driven by its strong financial performance and positive earnings call. The company shows significant revenue growth and robust operational metrics, though a high P/E ratio and overbought technical indicators suggest caution. Earnings call data reinforces confidence in growth, but tariff impacts and federal market uncertainty are potential risks.

Positive Factors

AI and Technology Adoption

AI momentum is strong with almost 30,000 users on Draft One, and significant deals including this product, indicating a robust technology adoption.

Earnings

Axon reported strong Q1 results, growing 31% versus a 25% forecast, with full-year revenue and adjusted EBITDA guidance raised slightly.

Product Growth

The newly created Platform Solutions segment, powered by VR and drones, grew 51% year-over-year to $57 million.

Negative Factors

Contracted Bookings

Future contracted bookings of $9.9 billion dropped slightly from $10.1 billion in Q4, similar to last year.

Federal Market Uncertainty

US Federal remains a point of uncertainty given DOGE and all the moving parts to budgets.

Production Capacity

The demand for TASER 10 is strong but limited by production capacity, prompting an increase in capital expenditure to boost capacity.

Axon Enterprise (AXON) vs. S&P 500 (SPY)

Market Cap

$56.42B

Dividend YieldN/A

Average Volume (3M)663.70K

Price to Earnings (P/E)176.3

Beta (1Y)1.61

Revenue Growth32.48%

EPS Growth24.29%

CountryUS

Employees4,100

SectorIndustrials

Sector Strength88

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.41

Shares Outstanding77,850,815

10 Day Avg. Volume756,578

30 Day Avg. Volume663,701

Financial Highlights & Ratios

PEG Ratio5.45

Price to Book (P/B)22.46

Price to Sales (P/S)0.00

P/FCF Ratio161.73

Enterprise Value/Market Cap0.95

Enterprise Value/Revenue7.13

Enterprise Value/Gross Profit43.18

Enterprise Value/Ebitda64.90

Forecast

1Y Price Target

$728.15

Price Target Upside-0.03% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering16

Axon Enterprise Business Overview & Revenue Model

Company DescriptionAxon Enterprise, Inc. is a leading provider of public safety technology and equipment. The company is best known for its development of conducted electrical weapons (CEWs), body-worn cameras, and digital evidence management solutions. Serving law enforcement, military, and civilian markets, Axon is committed to advancing transparency and accountability through innovative technology that enhances public safety and security.

How the Company Makes MoneyAxon Enterprise generates revenue through a diversified model that includes the sale of devices, software, and services. Its product sales primarily consist of TASER-branded CEWs and related accessories. In addition to device sales, Axon offers subscription-based software services through its Axon Cloud platform, which includes evidence management solutions, real-time situational awareness, and enhanced data analytics. Axon also provides professional services such as training and support to its clients. Key revenue streams are bolstered by long-term contracts with law enforcement agencies, which ensure recurring revenue through ongoing software subscriptions and device upgrades. Strategic partnerships and collaborations further enhance Axon's market position and drive growth in its core sectors.

Axon Enterprise Key Performance Indicators (KPIs)

Any

Annual Recurring Revenue

Annual Recurring Revenue
Represents the predictable revenue stream from subscription-based products or services, indicating financial stability and potential for long-term growth.

Chart InsightsAxon's Annual Recurring Revenue (ARR) has shown robust growth, surpassing $1.1 billion, a 34% increase year-over-year. This growth is fueled by strong international demand and rapid adoption of new products like TASER 10. The company projects continued momentum with a 27% revenue growth forecast for 2025. Despite potential tariff impacts and federal market uncertainties, Axon remains confident in its expansion strategy, underpinned by strong bookings and a 123% Net Revenue Retention rate.

Data provided by:

Main Street Data

Axon Enterprise Financial Statement Overview

Summary

Axon Enterprise is in a strong financial position with notable revenue growth, profitability, and cash flow generation. While the EBIT margin suggests potential for operational improvements, the company's stable balance sheet and strong cash flow metrics indicate a solid financial foundation, positioning it well for future growth.

Income Statement

Very Positive

Axon Enterprise demonstrates robust financial health with a strong revenue growth rate of 33.3% from the previous year to the TTM period. Gross profit and net profit margins are healthy at 59.5% and 18.1% respectively, showcasing efficient cost management and profitability. However, the EBIT margin of 2.8% indicates room for improvement in operational efficiency.

Balance Sheet

Positive

The balance sheet is solid with a debt-to-equity ratio of 0.31, reflecting moderate leverage that is manageable. Return on equity is impressive at 16.2%, indicating effective use of equity to generate profits. The equity ratio of 52.0% suggests a stable capital structure with substantial equity backing.

Cash Flow

Very Positive

Cash flow performance is strong, highlighted by a significant free cash flow growth rate of 155.5% from the previous year. The operating cash flow to net income ratio is 1.08, indicating ample cash flow generation relative to net income. The free cash flow to net income ratio of 0.88 underscores efficient cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.08B	1.56B	1.19B	863.38M	681.00M
	Gross Profit
1.24B	955.38M	728.64M	540.91M	416.33M
	EBIT
58.54M	154.79M	93.25M	-168.12M	-14.15M
	EBITDA
437.03M	194.63M	227.62M	-149.43M	-475.00K
	Net Income Common Stockholders
377.03M	174.23M	147.14M	-60.02M	-1.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
986.35M	1.32B	974.69M	443.02M	561.97M
	Total Assets
4.47B	3.44B	2.85B	1.69B	1.38B
	Total Debt
721.67M	710.66M	711.11M	26.98M	24.38M
	Net Debt
266.83M	112.12M	357.43M	-329.35M	-131.06M
	Total Liabilities
2.15B	1.82B	1.58B	640.36M	404.77M
	Stockholders Equity
2.33B	1.61B	1.27B	1.05B	976.25M
Cash Flow		Free Cash Flow
329.53M	128.99M	179.25M	74.22M	-34.39M
	Operating Cash Flow
408.31M	189.26M	235.36M	124.49M	38.48M
	Investing Cash Flow
-490.57M	12.48M	-830.97M	252.56M	-356.53M
	Financing Cash Flow
-45.44M	41.31M	598.10M	-174.18M	299.26M

Axon Enterprise Technical Analysis

Technical Analysis Sentiment

Positive

Last Price728.39

Price Trends

50DMA

578.82

Positive

100DMA

591.76

Positive

200DMA

525.10

Positive

Market Momentum

MACD

40.69

Negative

RSI

76.47

Negative

STOCH

96.40

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXON, the sentiment is Positive. The current price of 728.39 is above the 20-day moving average (MA) of 628.78, above the 50-day MA of 578.82, and above the 200-day MA of 525.10, indicating a bullish trend. The MACD of 40.69 indicates Negative momentum. The RSI at 76.47 is Negative, neither overbought nor oversold. The STOCH value of 96.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXON.

Axon Enterprise Risk Analysis

Axon Enterprise disclosed 55 risk factors in its most recent earnings report. Axon Enterprise reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Axon Enterprise Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	78 Outperform	$73.28B	18.95	18.23%	2.13%	14.11%	17.65%
TXT	77 Outperform	$13.58B	17.03	11.70%	0.11%	0.57%	-5.62%
AXON	76 Outperform	$56.42B	176.34	15.13%	―	32.48%	24.29%
LHX	76 Outperform	$40.82B	25.88	8.49%	2.13%	5.39%	36.86%
LMT	76 Outperform	$105.24B	19.40	82.55%	2.87%	3.12%	-15.29%
NOC	70 Outperform	$67.74B	18.52	25.41%	1.80%	0.61%	77.28%
Sector *	64 Neutral	$4.39B	12.06	5.17%	249.63%	4.03%	-11.04%

* Industrials Sector Average

Performance Comparison

AXON

Axon Enterprise

728.39

439.60

152.22%

General Dynamics

278.51

-14.40

-4.92%

LHX

L3Harris Technologies

226.86

7.78

3.55%

LMT

Lockheed Martin

465.14

10.85

2.39%

NOC

Northrop

469.05

6.78

1.47%

TXT

Textron

76.00

-13.08

-14.68%

Axon Enterprise Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 21.03%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call presented a largely positive view of Axon's performance, with significant revenue growth, strong bookings, and increased guidance for 2025. While there are some challenges related to tariffs and federal market uncertainty, the overall sentiment reflects confidence in continued growth and expansion.

Q1-2025 Updates

Positive Updates

Record Q1 Revenue and Growth

Axon reported first quarter revenue of $604 million, representing a 31% increase year-over-year. This marks the 13th consecutive quarter with over 25% growth.

Strong Bookings and Pipeline

Q1 bookings were strong, with a great indicator of momentum. The company expects another record for annual bookings with growth rates similar to last year.

Software and Services Growth

Software and Services revenue increased by 39% year-over-year to $263 million, driven by digital evidence management and premium add-ons.

TASER 10 Rapid Adoption

TASER 10 orders are pacing at 2x the rate of adoption compared to TASER 7, indicating strong market acceptance and growth potential.

International Expansion

International bookings are off to a strong start, with demand in regions such as Australia, Latin America, Canada, Asia, the UK, and Europe.

Adjusted EBITDA Margin and ARR

Axon delivered a 25.7% adjusted EBITDA margin with $1.1 billion in Annual Recurring Revenue (ARR), a 34% increase year-over-year.

Guidance Increase for 2025

Axon raised its revenue guidance for 2025 to a range of $2.6 billion to $2.7 billion, representing 27% annual growth at the midpoint.

Negative Updates

Tariff Impact on Margins

Tariffs are expected to impact the adjusted EBITDA margin guidance by approximately 50 basis points for the full year.

Federal Market Uncertainty

There is uncertainty within federal agencies due to ongoing budget discussions and reconciliation, impacting the volume of opportunities in the federal pipeline.

Company Guidance

During the call, Axon provided a detailed business outlook and guidance for fiscal year 2025. They reported first-quarter revenue of $604 million, a 31% year-over-year increase, marking their 13th consecutive quarter of over 25% growth. The company anticipates 2025 revenue to range between $2.6 billion and $2.7 billion, representing a 27% annual growth at the midpoint. They also project an adjusted EBITDA margin of approximately 25%, with guidance raised to $650 million to $675 million. Their Annual Recurring Revenue (ARR) reached $1.1 billion, up 34% year-over-year, supported by a Net Revenue Retention (NRR) rate of 123%. Axon highlighted strong international demand and notable adoption rates for their new products, including TASER 10 and Draft One, with TASER 10 orders pacing at twice the rate of TASER 7 during its first two years. The company also addressed possible tariff impacts, estimating a 50 basis point effect on their full-year adjusted EBITDA margin.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.