Axon Enterprise (AXON) AI Stock Analysis

• Market Cap: $43.61B
• Dividend Yield: N/A
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): 355.6
• Beta (1Y): 1.61
• Revenue Growth: 31.77%
• EPS Growth: -15.34%
• Country: US
• Employees: 4,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 2.15
• Shares Outstanding: 80,397,675
• 10 Day Avg. Volume: 1,310,175
• 30 Day Avg. Volume: 1,154,328
• PEG Ratio: -5.39
• Price to Book (P/B): 14.08
• Price to Sales (P/S): 16.43
• P/FCF Ratio: 608.15
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 15.94
• Enterprise Value/Gross Profit: 26.73
• Enterprise Value/Ebitda: 168.72
• 1Y Price Target: $729.54
• Price Target Upside: 34.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 7.69
• Revenue Forecast (FY): $3.59B

• Rating: 60 Neutral
• Price Target: $546.00 ▲(0.66% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is anchored by solid but recently pressured financial performance (margin and free-cash-flow conversion deterioration alongside higher debt). Offsetting that, the latest earnings call was meaningfully positive with strong bookings momentum and bullish multi-year growth targets. Technicals and valuation are the primary constraints, with a longer-term downtrend and a very high P/E.

Positive Factors

Recurring revenue / ARR strength

Robust ARR growth and 125% net revenue retention indicate strong expansion within installed customers, supporting predictable recurring cash flows. This recurring base reduces reliance on one‑time hardware sales, enabling durable revenue visibility and higher lifetime value per agency.

Sustained top‑line scale

Multi-year, high single to double-digit revenue growth demonstrates successful market penetration and scalable go‑to‑market. Sustained demand across hardware, software and services supports long-term market share gains and investment capacity to fund product R&D and international expansion.

Capital structure simplification

Eliminating remaining convertible notes removes a contingent dilution vector and simplifies the balance sheet. This reduces future refinancing/complexity risk, improves shareholder clarity, and gives management more optionality for capital allocation and tuck‑in M&A without convertible overhang.

Negative Factors

Weakened free cash flow conversion

Material decline in operating and free cash flow weakens internal funding for growth and increases reliance on external capital. Working capital and inventory timing drove the weakness, making near‑term reinvestment and margin commitments more challenging and raising execution risk until conversion normalizes.

Rising leverage and compressed ROE

Sharply higher debt alongside equity growth while ROE collapses signals that capital deployment has yet to generate proportional returns. Elevated leverage reduces financial flexibility, raises interest/service burden and amplifies downside in slower growth or margin pressure scenarios.

Gross margin pressure & tariff/mix volatility

Tariffs, component inflation and increasing share of lower‑margin platform solutions create persistent margin variability. Even if management bakes tariffs into guidance, unresolved trade/regulatory outcomes and product‑mix shifts can depress gross margins intermittently and complicate long‑term margin predictability.

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

Strong multi-year revenue scale-up and ~60% gross margins, plus a growing equity base. Offsetting this, 2025 showed sharp margin compression (operating profit turned negative), weaker cash conversion (free cash flow fell materially), and a notable build in debt that reduced returns on equity.

Income Statement

Revenue growth has been strong over the cycle (from $681M in 2020 to $2.78B in 2025), with consistently high gross margins around ~60%. However, profitability has become more volatile: net margin fell from 18.1% (2024) to 4.5% (2025) and operating profit turned negative in 2025, suggesting a meaningful step-up in operating costs/investment. Overall: attractive top-line scale-up and gross profitability, but recent margin compression is a key watch item.

Balance Sheet

The equity base has grown materially (to $3.24B in 2025) and the company still shows moderate leverage, with debt-to-equity around ~0.59 in 2025. That said, debt has increased sharply (from ~$711M in 2022 to ~$1.91B in 2025), while returns on equity have compressed (from 16.2% in 2024 to 3.8% in 2025), indicating profitability is not keeping pace with the expanding capital base and leverage.

Cash Flow

Cash generation is positive but has weakened recently. Operating cash flow declined from $408M (2024) to $211M (2025), and free cash flow fell from $330M to $75M (down ~48%). Free cash flow covered only ~36% of net income in 2025 versus ~81% in 2024, pointing to a less favorable cash conversion trend. Earlier years show the business can produce solid free cash flow, but the latest year reflects pressure from working capital and/or higher reinvestment.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.78B	2.08B	1.56B	1.19B	863.38M
Gross Profit	1.66B	1.24B	955.45M	728.64M	531.09M
EBITDA	262.66M	437.03M	183.37M	227.62M	-117.11M
Net Income	124.91M	377.03M	175.78M	147.14M	-60.02M
Balance Sheet
Total Assets	7.00B	4.47B	3.41B	2.85B	1.69B
Cash, Cash Equivalents and Short-Term Investments	1.71B	986.35M	1.32B	974.69M	443.02M
Total Debt	1.91B	1.40B	710.66M	711.11M	20.44M
Total Liabilities	3.76B	2.15B	1.79B	1.58B	640.36M
Stockholders Equity	3.24B	2.33B	1.61B	1.27B	1.05B
Cash Flow
Free Cash Flow	75.08M	329.53M	128.99M	179.25M	74.22M
Operating Cash Flow	211.34M	408.31M	189.26M	235.36M	124.49M
Investing Cash Flow	-724.93M	-490.57M	12.48M	-830.97M	252.56M
Financing Cash Flow	1.25B	-45.44M	41.31M	598.10M	-174.18M

Axon Enterprise Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 542.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXON, the sentiment is Neutral. The current price of 542.4 is above the 20-day moving average (MA) of 451.79, above the 50-day MA of 538.67, and below the 200-day MA of 670.54, indicating a neutral trend. The MACD of -9.64 indicates Negative momentum. The RSI at 61.04 is Neutral, neither overbought nor oversold. The STOCH value of 88.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AXON.

Axon Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	77 Outperform	$102.81B	24.91	26.17%	1.55%	-0.14%	72.35%
LHX	75 Outperform	$68.09B	42.76	8.20%	1.61%	2.83%	47.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AXON	60 Neutral	$43.61B	355.65	4.48%	―	31.77%	-15.34%
KTOS	55 Neutral	$14.68B	654.86	1.31%	―	14.00%	23.78%
SSTI	49 Neutral	$92.70M	-8.62	-14.61%	―	-1.83%	-642.89%

Axon Enterprise Corporate Events

Axon Enterprise Eliminates Remaining Convertible Notes, Streamlining Capital Structure

Axon Enterprise, Inc. redeemed $840,000 in principal of its 0.50% convertible senior notes due 2027 on February 10, 2026, paying cash equal to 100% of principal plus accrued interest. On February 11, 2026, the company also settled conversions of $80.27 million in principal of these notes, delivering about $80.3 million in cash and 211,870 shares, and received 41,139 shares from option counterparties under existing hedges.

Following these redemptions and conversions, no convertible notes remain outstanding, simplifying Axon’s capital structure and eliminating future obligations related to this debt. The moves indicate a completed transition away from this convertible financing, which may reduce potential future equity dilution for existing shareholders and clarify the company’s balance sheet profile.

The most recent analyst rating on (AXON) stock is a Buy with a $860.00 price target. To see the full list of analyst forecasts on Axon Enterprise stock, see the AXON Stock Forecast page.

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.