Axon Enterprise (AXON) AI Stock Analysis

• Market Cap: $43.39B
• Dividend Yield: N/A
• Average Volume (3M): 630.38K
• Price to Earnings (P/E): 161.3
• Beta (1Y): 1.66
• Revenue Growth: 31.77%
• EPS Growth: -15.34%
• Country: US
• Employees: 4,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.17
• Shares Outstanding: 78,910,470
• 10 Day Avg. Volume: 490,053
• 30 Day Avg. Volume: 630,385
• PEG Ratio: 1.08
• Price to Book (P/B): 19.34
• Price to Sales (P/S): 21.62
• P/FCF Ratio: 136.62
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 15.18
• Enterprise Value/Gross Profit: 25.18
• Enterprise Value/Ebitda: 124.91
• 1Y Price Target: $800.38
• Price Target Upside: 57.07% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $629.00 ▲(23.43% Upside)

Axon's overall score is driven by strong earnings call results and growth potential, but is weighed down by technical analysis indicating bearish momentum and high valuation concerns. Financial performance shows growth but highlights risks in profitability and cash flow management.

Positive Factors

Recurring revenue and retention

Axon's strong software and services growth with 124% net revenue retention demonstrates a durable subscription-based revenue stream. High retention and upsell within public safety agencies provide predictable multi-year cash flows, supporting investment and reducing reliance on one-time hardware sales.

High gross margins

Sustainable gross margins above 60% reflect a software-heavy mix and efficient device economics. Elevated gross margins give Axon a structural profit buffer to fund R&D, international expansion and strategic initiatives, helping preserve operating leverage across business cycles.

International expansion and bookings

Winning large international cloud deals and accelerating bookings diversify Axon's addressable market and reduce dependence on domestic procurement cycles. Sustained cross-border traction supports multi-year revenue growth and helps amortize fixed platform costs globally.

Negative Factors

Declining free cash flow

A near 18% drop in FCF and low cash conversion (OCF/NetIncome 0.18) signal deteriorating cash generation. Persistently weaker FCF constrains ability to pay down debt, self-fund acquisitions or ramp capex, making the company more reliant on external financing over the medium term.

Rising leverage and weaker ROE

Higher debt-to-equity and falling ROE indicate increased financial leverage and declining capital efficiency. Elevated leverage raises interest and refinancing risk, reducing flexibility to weather procurement cycles or fund strategic initiatives without pressuring returns to shareholders.

Margin pressure from tariffs and federal headwinds

Tariff-related margin erosion and slower federal contract contributions are structural risks for a hardware-software mix. Persistent tariff exposure and volatile government procurement can compress device margins and delay large deals, challenging long-term margin sustainability unless sourcing or contract mix changes occur.

Axon Enterprise Business Overview & Revenue Model

Company Description

Axon Enterprise, Inc. develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand in the United States and internationally. It operates through two segments, TASER, and Software and Sensors. The company also offers hardware and cloud-based software solutions that enable law enforcement to capture, securely store, manage, share, and analyze video and other digital evidence. Its products include TASER 7, TASER X26P, TASER X2, TASER Consumer devices, and related cartridges; on-officer body cameras, Axon Fleet in-car systems, and other devices; Axon Evidence digital evidence management software; Axon Signal enabled devices, as well as hardware extended warranties; and Axon docks, cartridges, and batteries. It sells its products through its direct sales force, distribution partners, online store, and third-party resellers. Axon Enterprise, Inc. has a strategic partnership with Fusus, Inc. to expand the capabilities of Axon Respond and the Fusus Real Time Crime Center in the Cloud solution to provide agencies real-time operations situational awareness, including streamlined investigative workflows. The company was formerly known as TASER International, Inc. and changed its name to Axon Enterprise, Inc. in April 2017. Axon Enterprise, Inc. was incorporated in 1993 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

Axon generates revenue primarily through the sale of its hardware products, such as body-worn cameras and related equipment, as well as subscription services for its digital evidence management platform, Evidence.com. The company employs a recurring revenue model, where law enforcement agencies pay for software subscriptions and service contracts, ensuring a steady cash flow. Additionally, Axon benefits from partnerships with various governmental and law enforcement organizations, providing tailored solutions that foster long-term relationships. The combination of hardware sales, subscription services, and strategic partnerships are key contributors to Axon's overall earnings.

Axon Enterprise Financial Statement Overview

Summary

Axon Enterprise shows strong revenue growth and gross profit margins but faces challenges in maintaining net profitability and operational efficiency. Increased leverage and declining return on equity highlight potential financial risks. Cash flow management needs improvement, with declining free cash flow growth.

Income Statement

Axon Enterprise has shown consistent revenue growth over the years, with a notable increase of 6.96% in the TTM period. The gross profit margin remains strong at over 60%, indicating efficient cost management. However, the net profit margin has decreased in the TTM period to 10.05% from 18.10% in 2024, reflecting challenges in maintaining profitability. The negative EBIT margin in the TTM period suggests operational inefficiencies that need addressing.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.69 in the TTM period, indicating a higher reliance on debt financing, which could pose risks if not managed properly. Return on equity has decreased to 13.43% in the TTM period, down from 16.20% in 2024, suggesting a decline in profitability relative to shareholder equity. The equity ratio remains healthy, showing a strong capital structure.

Cash Flow

Axon Enterprise's free cash flow has decreased by 17.83% in the TTM period, highlighting potential liquidity challenges. The operating cash flow to net income ratio is relatively low at 0.18, indicating that net income is not fully translating into cash flow. However, the free cash flow to net income ratio remains moderate at 0.59, suggesting some level of cash generation efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.56B	2.08B	1.56B	1.19B	863.38M	681.00M
Gross Profit	1.54B	1.24B	955.45M	728.64M	531.09M	416.33M
EBITDA	310.92M	437.03M	183.37M	227.62M	-117.11M	6.28M
Net Income	257.10M	377.03M	175.78M	147.14M	-60.02M	-1.72M
Balance Sheet
Total Assets	6.66B	4.47B	3.41B	2.85B	1.69B	1.38B
Cash, Cash Equivalents and Short-Term Investments	2.38B	986.35M	1.32B	974.69M	443.02M	561.97M
Total Debt	2.10B	1.40B	710.66M	711.11M	20.44M	0.00
Total Liabilities	3.63B	2.15B	1.79B	1.58B	640.36M	404.77M
Stockholders Equity	3.03B	2.33B	1.61B	1.27B	1.05B	976.25M
Cash Flow
Free Cash Flow	145.02M	329.53M	128.99M	179.25M	74.22M	-34.39M
Operating Cash Flow	244.27M	408.31M	189.26M	235.36M	124.49M	38.48M
Investing Cash Flow	-940.23M	-490.57M	12.48M	-830.97M	252.56M	-356.53M
Financing Cash Flow	1.44B	-45.44M	41.31M	598.10M	-174.18M	299.26M

Axon Enterprise Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 509.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXON, the sentiment is Negative. The current price of 509.58 is below the 20-day moving average (MA) of 601.60, below the 50-day MA of 573.92, and below the 200-day MA of 685.50, indicating a bearish trend. The MACD of -13.67 indicates Positive momentum. The RSI at 24.42 is Positive, neither overbought nor oversold. The STOCH value of 2.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AXON.

Axon Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHX	75 Outperform	$67.40B	42.24	8.20%	1.61%	2.83%	47.00%
NOC	75 Outperform	$97.80B	23.70	26.17%	1.55%	-0.14%	72.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	63 Neutral	$19.02B	880.78	1.20%	―	14.00%	23.78%
AXON	58 Neutral	$43.39B	161.31	10.03%	―	31.77%	-15.34%
SSTI	49 Neutral	$89.65M	-8.44	-14.61%	―	-1.83%	-642.89%

Axon Enterprise Corporate Events

Axon Enterprise Announces Redemption of 2027 Convertible Notes

On December 18, 2025, Axon Enterprise, Inc. announced that it had delivered a notice of redemption for its 0.50% convertible senior notes due 2027, electing to redeem all outstanding notes on February 10, 2026 at 100% of principal plus accrued and unpaid interest. Holders may convert their notes until the close of business on February 6, 2026, after which conversion will no longer be permitted, with Axon set to settle valid conversions through a mix of cash (for principal and any fractional share amounts) and shares of common stock for any value above principal, based on a 30-trading-day observation period running from December 24, 2025 through February 6, 2026; the move effectively accelerates the wind-down of this debt instrument and could influence Axon’s capital structure and shareholder dilution depending on the level of note conversions.

The most recent analyst rating on (AXON) stock is a Buy with a $713.00 price target. To see the full list of analyst forecasts on Axon Enterprise stock, see the AXON Stock Forecast page.

Axon Enterprise Announces Convertible Notes Exchange

On December 9, 2025, Axon Enterprise, Inc. entered into agreements with certain holders of its 0.50% convertible senior notes due 2027 to exchange approximately $177.9 million of these notes for cash and common stock. This exchange is expected to close around December 16, 2025, and may influence the market price of Axon’s stock as hedged holders adjust their positions. The company will have about $100.1 million of notes outstanding post-exchange.

The most recent analyst rating on (AXON) stock is a Buy with a $925.00 price target. To see the full list of analyst forecasts on Axon Enterprise stock, see the AXON Stock Forecast page.