Axon Enterprise (AXON) AI Stock Analysis

• Market Cap: $59.73B
• Dividend Yield: N/A
• Average Volume (3M): 623.20K
• Price to Earnings (P/E): 188.1
• Beta (1Y): 1.57
• Revenue Growth: 32.09%
• EPS Growth: 10.30%
• Country: US
• Employees: 4,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 2.12
• Shares Outstanding: 78,504,440
• 10 Day Avg. Volume: 447,895
• 30 Day Avg. Volume: 623,197
• PEG Ratio: 1.07
• Price to Book (P/B): 19.34
• Price to Sales (P/S): 21.62
• P/FCF Ratio: 136.62
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 28.33
• Enterprise Value/Gross Profit: 46.85
• Enterprise Value/Ebitda: 202.79
• 1Y Price Target: $886.62
• Price Target Upside: 15.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 67 Neutral
• Price Target: $811.00 ▲(5.81% Upside)

Axon Enterprise's overall stock score is driven by strong earnings call results and robust financial performance, particularly in revenue growth and product adoption. However, high valuation metrics and mixed technical indicators present challenges. The company's strategic investments in innovation and international expansion are promising, but profitability and cash flow issues need addressing for sustained growth.

Positive Factors

Revenue Growth

Consistent revenue growth over 14 quarters demonstrates strong market demand and effective sales strategies, supporting long-term expansion.

Product Innovation

Strong bookings for new AI products indicate successful innovation and potential for future revenue streams, enhancing competitive positioning.

International Expansion

Expanding into new international markets diversifies revenue sources and reduces reliance on domestic sales, supporting long-term growth.

Negative Factors

Profitability Challenges

Declining profit margins suggest operational inefficiencies, which could impact long-term profitability if not addressed.

Cash Flow Issues

Significant decline in free cash flow indicates potential liquidity issues, which could constrain future investment and growth opportunities.

Scaling New Hardware

Difficulties in scaling new hardware products could delay market entry and revenue realization, impacting growth potential.

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 through multiple streams, primarily by selling its hardware products, such as Tasers and body-worn cameras, as well as through subscription-based services for its software platforms. The company offers a cloud-based evidence management system known as Evidence.com, which allows agencies to store, manage, and share digital evidence securely. Subscription fees from this service provide a recurring revenue model. Additionally, Axon has established significant partnerships with various law enforcement agencies and government entities, enabling it to secure long-term contracts and bulk orders, further contributing to its earnings. The company also invests in research and development to innovate and expand its product offerings, ensuring it remains competitive in the evolving public safety landscape.

Axon Enterprise Financial Statement Overview

Summary

Axon Enterprise demonstrates strong revenue growth and a solid gross profit margin, reflecting effective cost management. However, profitability metrics such as net profit margin and EBIT margin have shown some decline, indicating potential operational inefficiencies. The balance sheet is stable with moderate leverage, but cash flow metrics suggest challenges in cash generation. Overall, the company is on a growth trajectory but needs to address profitability and cash flow issues to sustain long-term financial health.

Income Statement

Axon Enterprise shows a strong revenue growth trajectory with a 7.38% increase in TTM. The gross profit margin is robust at 60.47%, indicating efficient cost management. However, the net profit margin has decreased to 13.64% from 18.10% in the previous year, and the EBIT margin is negative, reflecting potential operational challenges.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.75, suggesting a balanced approach to leverage. Return on equity is healthy at 13.43%, though it has decreased from the previous year. The equity ratio stands at 43.96%, indicating a strong equity base relative to total assets.

Cash Flow

Operating cash flow is positive, but the free cash flow has declined significantly by 51.33% in the TTM. The operating cash flow to net income ratio is 0.21, indicating that cash generation is lower relative to net income. The free cash flow to net income ratio is 0.64, showing some cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.39B	2.08B	1.56B	1.19B	863.38M	681.00M
Gross Profit	1.45B	1.24B	955.45M	728.64M	531.09M	416.33M
EBITDA	334.09M	437.03M	183.37M	227.62M	-117.11M	6.28M
Net Income	326.31M	377.03M	175.78M	147.14M	-60.02M	-1.72M
Balance Sheet
Total Assets	6.22B	4.47B	3.41B	2.85B	1.69B	1.38B
Cash, Cash Equivalents and Short-Term Investments	2.09B	986.35M	1.32B	974.69M	443.02M	561.97M
Total Debt	2.05B	721.67M	710.66M	711.11M	20.44M	0.00
Total Liabilities	3.48B	2.15B	1.79B	1.58B	640.36M	404.77M
Stockholders Equity	2.73B	2.33B	1.61B	1.27B	1.05B	976.25M
Cash Flow
Free Cash Flow	176.49M	329.53M	128.99M	179.25M	74.22M	-34.39M
Operating Cash Flow	275.58M	408.31M	189.26M	235.36M	124.49M	38.48M
Investing Cash Flow	-1.49B	-490.57M	12.48M	-830.97M	252.56M	-356.53M
Financing Cash Flow	1.27B	-45.44M	41.31M	598.10M	-174.18M	299.26M

Axon Enterprise Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 766.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 766.47 is above the 20-day moving average (MA) of 752.29, above the 50-day MA of 758.79, and above the 200-day MA of 670.20, indicating a bullish trend. The MACD of -3.11 indicates Negative momentum. The RSI at 53.53 is Neutral, neither overbought nor oversold. The STOCH value of 71.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXON.

Axon Enterprise Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LHX	78 Outperform	52.73B	31.47	7.70%	1.68%	2.93%	43.29%
NOC	77 Outperform	82.63B	21.22	25.50%	1.52%	-0.65%	77.20%
KTOS	68 Neutral	12.78B	865.34	0.74%	―	7.76%	40.33%
AXON	67 Neutral	$59.73B	188.07	14.00%	―	32.09%	10.30%
SSTI	61 Neutral	153.88M	-15.48	-12.68%	―	1.47%	-430.99%
DGLY	41 Neutral	3.37M	0.00	-119.56%	―	-20.52%	83.27%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%