Axon Enterprise, Inc. (AXON) on Q2 2021 Results - Earnings Call Transcript
Rick Smith: All right. Great job on the video, Andrea. And folks, I'm giving for Andrea a heart-attack today; I was supposed to be safely in my home office connected to the internet, but I've been out all day, with most of the summer doing customer demos. I'm in the fleet three demo vehicle, and we had a bunch of great meetings today. In fact, we're going to do this live without a net, I am going to do a quick screen share and show you what we're seeing live from the fleet vehicle here; hang on a second. All right, so as you can see there, hey, Garrett wave; in the backseat, we have our prisoner transport area, that's Garrett Langley, the CEO of Flock Safety, an incredible partner of ours, they do -- they are all here with another customers. They've told us today about a number of crimes they've already solved, thanks to Flock cameras. And then we do the mobile; so it's has been a great investment for us, and really brings powerful capability through partnership; you'll see on the upper left there is a wide angle camera, and then on the right is our high resolution 4K camera that we use for the license plate reading, gives us great resolution at closing speeds of upto 140 miles an hour. Yes, we've got our Product Manager here as well. I'll show you -- here is an example of a plate read; this is from -- just a sample list we use not from criminal data; so this is just a sample we did earlier today. And you'll see -- this will pop an alert; the officer can then check and make sure that it's got it correct, they can go in and they can do things like categorize their existing videos, whether it's the in-car body cameras, etcetera. It's a really intuitive simple user interface, and we're getting fantastic customer reviews. All right, so with that -- I have been traveling a lot seeing our customers which has been great. We've also been encouraged to see this summer at The National Conversation Ramp; policing is evolving to reflect what we've known all along, i.e. police reform and progress bars investment, and focused attention from our best and brightest minds. We're obviously pumped about our quarterly performance, and I couldn't be prouder of how our team is executing and it's translating into growth that we've sustained now over the last few years, and we intend to keep doing it. I'm also proud of our product development team. They have been working really hard as we've invested to build these transformative capabilities. In the fleet three, which I just demoed right here; we're able to bring artificial intelligence, to bring ALPR to every car. Within 90 days of launch, we've already been done deploying 550 vehicles at Pinellas County , and to my awareness, I -- as far as I know, that's the largest ALPR in the country, and it's happening literally within weeks our product launch. And we're already late stage negotiations with another major city to deploy over 1,500 license plate readers, more than doubling what we're doing right now, tech analysis. So you all know, you know, you shouldn't text and drive; those who are doing this all the time they're typing in license plates while they're driving, or they've got to read it in over the radio. Fleet Street does that for them at a dramatically lower price point, allowing them to deploy this to every car making driving safer, and reducing crime. We've already had customers just in the first few weeks catching serious offenders and finding missing children. On another front our Axon evidence software continues to grow well beyond simply being a backend for our cameras. We want highly competitive digital evidence program in EMEA with an EMEA government encompassing the management of all digital evidence, independent of body camera programs; and this builds on to similar success we've had in Canada and paves the way for us to continue to lead with our software solutions. We feel really well positioned for the back half of the year and beyond as we see traction beyond core, U.S. municipal law enforcement moving into counties and state patrols, federal government and private enterprises. International revenue grew 60% in Q2 and international bookings, which are our forward looking indicator nearly tripled. So in some my part, at Axon, we're excited, we're leading the way in creating a work environment where employees can maximize their happiness and productivity. We offer remote hybrid options; you can work from the office, you can work from your home, you can work from your car; I'm showing you today even on the earnings call. So, we're focused on doing whatever it takes to get the best top tier talent, keep them focused, keep them rested, keep them happy, keep them energized, keep them creative and that's how you get great products and breakout capabilities. So our leadership is now supported by an exceptional workforce that is almost 2,000 people and that's what is going to help drive us to long-term profitable growth; this continuing to build and maintain and groom a fantastic team. And with that, let me turn over to the President of the Company, Luke Larson. Luke Larson: Thanks, Rick. The business is firing on all cylinders and we are focused on sustaining momentum. Operationally, we're doing really well, even in the face of global supply chain risk. The reality of the current macro situation is well documented, from geopolitical factors to semiconductor and resin shortages, to logistics, import stoppages are the continued impact of COVID. There's never been a more complex time to make electronics, we have risen to the challenge, and we monitor conditions daily and have put risk mitigation strategies in place that are supporting a rapid growth. While these headwinds persist, our teams are definitely navigating and effectively positioning the business to continue to meet our increasing demand pipeline. In fact, our teams are delivering Olympic level execution on behalf of all of our stakeholders, most notably our customers and our shareholders. Another area where you will see this is our teaser segment gross margins, which are up 500 basis points over last year, as we sell into strong demand; we have engineered costs out of our building materials, and the effects of that continued into this quarter. As you saw in our video and read in our letter, we are ecstatic about the fleet 3 launch and that it's shipping; and we're getting ecstatic reviews from our early customers, as Rick mentioned earlier. And we believe we're just getting started with virtual reality training, with booking nearing $8 million in the first six months, up less than $1 million in the first six months of last year. You've heard me talk about virtual reality on the last several earnings calls, and we're pleased of the demand that we're seeing, and that validates our excitement. We're looking forward to a strong back half of the year and continued momentum into 2022. And with that, let me turn it over to our Chief Financial Officer, Jawad Ahsan. Jawad Ahsan: Thanks, Luke. The results we're sharing with you today reflect the straightforward and consistent nature of our strategy, which is threefold; execute in the near term in a focused and disciplined way, identify and invest in future areas of growth, and then finally, reinvest the upside from our strong top line performance back into the business to accelerate that growth. We believe that the goals we're working towards are profound, and that our success will be measured by metrics such as the number of lives saved and the level of transparency in the justice system. This is why last quarter, we invited you to look at our business the same way that we look at it; with a long term view. It's why we move to giving two-year annual guidance, because we're thinking about in building the business for the long-term. As you saw in our shareholder letter; today, we are raising our outlook for both fiscal year's 2021 and 2022, which reflects our confidence in our growing global demand. We now expect to deliver between $825 million to $850 million in revenues in 2021, and $960 million in revenues in 2022. We're also pleased with how our investments are seeing traction on three fronts; in international sales channels with new products in a new non-municipal law enforcement markets. Rick highlighted the international strength; now, I'd like to touch upon the traction we're seeing in these latter two categories: new products and new markets. New product bookings are up more than 100% year-over-year. We like looking at bookings as if they forward looking indicator as Rick mentioned, and we typically signed contracts with an average five-year life. These products are largely fast centric and are helping drive our net dollar retention of 119%. They're the result of more recent R&D and include software products, such as records, in standards, respond, VR, citizen, performance, transcription, Axon Air and others. We're also expanding outside of law enforcement into new markets, including federal, enterprise security, consumer and fire & EMS. Bookings in these new markets doubled year-over-year and we see substantial runway for expansion. We focused a lot on financial discipline, which means balancing investing for growth while also demonstrating leverage. This is an area where we feel a strong sense of accountability. So I'm pleased to point out that Q2 adjusted EBITDA grew at 83% year-over-year, and we were able to do that while investing to scale into a broader global profile. Finally, I wanted to highlight that I'm not only proud of how the business is executing, but also of the corporate strategy capability that we've built, where we're partnering with and investing in other innovators and thought leaders in our space. Our recent partnerships and investments are reflective of our vision for the Axon brand to become synonymous with public safety. And equally important, allow us to leverage and expand our platform in a transformative way. To build a public safety ecosystem of the future, we're aligning with other innovators and technology disruptors. For example, our expanding ecosystem relationships with Celebrate and Rapid SOS were driven by our focus on customers and their growing needs for digital evidence management and real-time operations. Our strategic investments in companies, such as Flock Safety, have done well and even more importantly, supported our fleet three go-to-market by allowing us to bundle and co sell our solutions, which you can literally see on display today. Our partnership with Skydio makes their drones in autonomy software solutions available to agencies through AXON. It also paves the way for the integration of Skydio's offerings with AXON product suite, giving customers groundbreaking evidence management, real-time situational awareness, and scene reconstruction capabilities. We take our role as capital stewards very seriously and I'm thrilled to share these exciting updates that demonstrate how our investments are creating real value for the company, our customers, and our shareholders. With that, Andrea, let's move to questions. Andrea James: Thank you, Jawad and team. Moderators, can we pull everybody into the gallery view, please? We're all in the gallery view, so everyone is on camera. Just remember that. We'll take our first question from Jonathan Ho at William Blair. Go ahead, Jonathan. You are up. Jonathan Ho: Hi, good afternoon and congratulations on the strong results. I just wanted to start out with some of the comments around supply chain and whether you're seeing any specific impact on product lines and what some of the mitigations, you mentioned, are that you've put into place around supply chain? Rick Smith: Great question. Supply chain constraints are a reality for every manufacturer, as we all know. We're managing through it because a lot of intention internally, specifically for me and my teams that as we work to mitigate that risk. Some of the things that we've done to mitigate risk is we've bought out and we bought in advance and beefed up our supply chain and our guiding factors is in the reality. Even with the supply chain constraints, we still feel really strong about the guidance that we put out earlier. Jonathan Ho: Got it. Then just in terms of a follow-up, can you give us a little bit more color on how you're reaching some of the newer markets, like federal enterprise and non-traditional customer types? Maybe if you can give us a sense of what could drive faster adoption in these markets? That'd be great as well, thank you. Rick Smith: Thanks for the question, Jonathan, nice to see you again. For us, it's really about focusing on building the right teams to enter these markets and we've talked about in the past on our federal team as well as Mike Shore on our enterprise security team and a lot of folks around the business that are opening up new segments for us. It's really just putting in the work. There's no shortcut to that and we're building stronger relationships. We're identifying stakeholders early in the federal space, we're identifying opportunities within the budget cycles within congress to fund some future projects. I think the team is just executing really well across all of those fronts. So very, very excited for what the future holds for our newer markets. Jonathan Ho: Thank you. Andrea James: Great. All of our analysts, we have you in our queue already. So, you're good. We were going to assume you're going to ask a question and if you're not, that's fine. Scott Bird from Needham. We'll have you up next. Go ahead, Scott. Scott Bird: Great. Thanks for taking my questions and congrats on a fantastic quarter. I guess lots of questions will set on one here international. You all highlighted international extensively in your prescriptive remarks. How should we think about that opportunity unfolding maybe from a product perspective over the next one to two years? TASER sales look good, camera sales generally look good. Are all of the markets facing big massive opportunities or is it really going to be led by one or the other over the near or intermediate term? Rick Smith: I think there's opportunity across the across the globe, Scott. Three or four years ago, when we started really explaining how we're thinking of going to market, we focused on three individual markets UK, Australia, and Canada and all of those continue to perform really well. What we're seeing in those markets is there's wider adoption of our product line. So, body cams, TASERs, and new developments without body cams, meaning managing other types of digital evidence that are not generated by body cameras. Of course, longer term, we're excited about things like -- in interview room and in records and so forth. So, in those tier-one markets, they continue to lead the way as we expand our product portfolio. Then there's growing opportunity in tier two and tier three markets just on TASERs and body cameras. The cloud is not a great fit everywhere across the world right now. So, in markets like that, we're really focusing more on the TASER side and building an install base that we can go back to later and sell body cameras in the cloud and it's working out. We're seeing TASER orders in very large volumes. We expect that to continue. It's not necessarily something that will happen every quarter, but every year for sure. We're really encouraged by just the growth in both in APAC, EMEA, and the Americas. So, very excited to see international continuing to grow. A lot of people put a lot of hard work into it and we have plenty of runway left in front of us. Scott Bird: Awesome, if I might, as a quick follow-up to that, Josh, is Axon body cameras. What's the reception been like for the LTE connectivity on the AV Threes internationally? Obviously, the reception I think has been generally positive here, quite positive. We have the same opportunity to see sales there or just didn't know if their infrastructure is set up the same way as our ? Josh Isner: Absolutely, it's got better than expected is the short answer to that one. We're seeing markets, but we do not necessarily think about our plan is, it's kind of our first candidates to deploy streaming technology. They're expressing a lot of desire to do so. So, our product team is just doing a fantastic job, trying to support as many vendor relationships as we can right now to make sure that we have a viable LTE partner in each market, whether it's an Asia, Europe, or South America. We're seeing demand across all of those markets. We're very excited. I'd like to call you one customer in the UK just signed our largest international Respond-Plus deal to date, which is our live streaming package. That happened in Q2 and we're very excited. There's a few more of those in the pipeline here. Scott Bird: Great. I'll jump back into the queue. Congrats on a wonderful quarter again. Andrea James: We'll take Mita Marshall from Morgan Stanley. Go ahead, Mita. You are up. Mita Marshall: Great, thanks. We echo my congratulations. You noted that you were doing your investments on the federal sales teams. I just wanted to get a sense of have you started to see the opportunities out of the DOJ? It is mandating of the camera policy or are those still things that we'll build in the pipeline as we go along? As you focus on the federal market, are there any unique software capabilities that you could develop for that market? Thanks Rick Smith: Yes, absolutely. I appreciate the question. I think if this was a baseball game, we still feel like we're in the first inning here in federal. So, we have a lot of opportunity in front of us. We've completed some large framework contracts and we expect customers to now order against those frameworks. We're seeing the business grow across DOJ and DHS and other segments of federal. We keep building the team to more specifically approach the different opportunities within the federal government. Just in the federal civilian market, a lot of opportunity for both body cameras and TASERs. Then, longer term, certainly building products specifically for federal customers, including the military, is on our radar. So, a lot of growth ahead in federal and really believe in the team to keep delivering in that regard. Mita Marshall: Great. Thanks. Andrea James: Okay, we'll take question from Will Power at Baird. Go ahead, Will. Will Power: Great. Thanks for taking the question. I guess I've got to ask Rick, since he's driving the car. We'd love to just to hear more about the early learnings on fleet three and ALPR, what do you think now in the vehicles? What are the early indications and comments you're getting from agencies and how do we think about the ramp of that product this year or next couple of years? Rick Smith: Yes. So first thing I would say is, this is the first product that we've launched that was developed substantially through our new engineering leadership. Hans Moran's our head of engineering came on right before we launched AB3. He kind of picked that up right at the end and he's really brought in some very talented people on his team and they push pretty hard with me to get an additional six months before we took the product to market to really wring out any of the bugs, so we could go to market at quality and it’s scale. And you never want to jinx it by patting yourself on the back this early, but much more hear from customers is that they're really happy with not only the design, but that the system does seem to be pretty wrung out in terms of pretty reliable, and they're not seeing the types of bugs that they've seen in some of our prior launches. We had find that right balance between innovation and speed and quality and testing pre-launch, as we've gotten bigger, especially in each new market, when we're launching a new product and a new market, you may decide to move a little bit faster. But as you start to hit scale like in the TASER and now in the body cameras and fleet business, you've got to be ready to launch at higher volumes and really at higher quality. So, one of these about customers, they really like the fleet was designed clearly to be an in car camera whereas the previous two versions were really spin offs of our body camera hardware. The ALPR is working much better than people expected, I mean, I think we've had customers telling us they've put some of these side by side with their more traditional and much more expensive license plate reader systems, and we're kicking their butt right now, part of it's just the technology of having a color camera makes it we can do state recognition much easier, a lot of the infrared systems struggle with that. And so you'll get a lot of miss reads because you get the plate number right, but the state wrong or to be able to read things like temporary plates, which are the paper ones that are printed out on a laser printer, a traditional infrared system won't even see those, they don't exist because they don't have infrared reflective coatings on it. So, we've also been able to learn through our partnership with Flock, and we've got probably an 18-months headstart of doing these color AI based ALPR cameras. You know, we've invested in them, we've got a board observer seat, we've done integrations on the back end and we're sharing learning’s across so we can both help each other. And I would just say that we're seeing a higher tax rate than we even thought, we would say, and usually agencies didn't think of ALPR is something you put in every car, because of the price point historically it's been well we have our dedicated ALPR vehicles, we have a couple of them. But I think we're seeing pretty widespread like with , some of these other big customers flipping the switch and it's just a software upgrade to put ALPR in every car. Will Power: That's great color, thank you. I just like to fit in one more question for whoever wants to take. I'd love just to hear an update on what kind of benefits you're seeing from some of the federal funding initiatives are designed to help state and local, is that something that's having a meaningful impact today, is most that still on the come from what do you see kind of the funding environment side? Rick Smith: Yes, it's interesting. It's a great question. Well, like, you know, this time last year, the we're wondering, and we're getting a lot of questions about hey what is the shutdowns going to mean for municipal budgets moving forward, and we're very thankful that they didn't seem to have a very large impact and then you tack on some of the federal funding through the different acts including the CARES Act and it's given major cities the opportunity to potentially spend more on technology, I wouldn't say that it's so much of an outlier that it's worth noting though, we're really have the belief that we're able to prove that our products generate a real ROI for our customers and that they're costing themselves money by not deploying our products and so we're really confident that what we're building has real value and that will continue with or without federal support and we're really focused on just continuing to build out those business cases. Will Power: Thank you. Operator: Okay, next we'll go to Keith Housum at Northcoast. Go ahead, Keith. Keith Housum: Thanks. I appreciate it. And congratulations for the quarter. Speaking of the quarter a little bit -- you know, the quarter was just . Was there anything unusual like large core areas that will not be repeated for the rest of the year; it should be taken into consideration? Rick Smith: We had some large CW activity internationally Keith, but I'd stopped short of saying that it was so heavy in Q2 that it wouldn't repeat itself in future quarters, we're very optimistic that the growth is going to continue and that we've got a very strong pipeline across both products in domestic and international. And so, we're really excited to get started in the second half year and continuing to grow. Keith Housum: Okay, great. And then you just had a paragraph in the letter, you talk about and properly on to a different various partner, you should consider that like a setback in the look on the dispatch, or just kind of planning in the evolution of the work you guys are doing more now. Can you provide some more context there? Rick Smith: Yes, so I'll take that one. I would say organizationally it’s a setback, we never let our customers fail. And in this case, I think what we just learned together was we have both underestimated how much strain it was going to put on such a small agency. We need hours per week from their dispatchers to be spending with our software developers and then just having IT support to be able to deploy and train people on software updates, because it has been a moving target. And so this is one of those where I think we saw have great respect and great gratitude for Maricopa, they helped us learn a ton about dispatch and they're going to continue to be a customer along much of our product line, we'll see where it shakes out, they have told us at this point, they just need something that's more mature and stable, they just don't have the bandwidth to keep iterating with us. In some ways, there's a little bit of an accelerator for us in that we have a major say partner and a major county lined up behind them. And we're also learning the needs of some of these big, very high volume CAD installations are just different than they are in the smaller agencies and we think that's where the volume of the market is, and so on the bright side of this is allowing us to really focus in on refining and getting the product for scale of these bigger customers. Keith Housum: It was Maricopa your only city or you did you have several other partners there? Rick Smith: No, they were our first and our only partners, they are still running on it. They've just like I said let us know they're fatigued and they've asked us to support them through the transition and we have, and then we're preparing. We're moving towards deployment we expect next year of a major city and a major County. Keith Housum: Great, thanks. Rick Smith: Just to clarify there Keith, we do have several cities under contract for dispatch. We're just working with them one at a time here as we build the product. And so while Maricopa was the only one live, there are certainly many behind that that are already signed up and contracted. Keith Housum: Thank you. Operator: Okay, next, Mike Latimore from Northland. Go ahead, Mike. Mike Latimore: Great. One north to the next north I guess here. You've talked in the past about growing cloud ARR $15 million a quarter; I guess that's still the goal and if so over the next couple of quarters, what would be the main driver of that growth? Rick Smith: Mike, great question. That's very much the plan we're still anticipating about 15 million of growth per quarter this year. And when you look out at the investments that we've been making in all the new products that are launching, the majority of them are SaaS centric, software centric, and they're getting traction that's what we tried to highlight in our prepared remarks in our shareholder letter, we're getting traction across the board. It's not any one product per se. And it's the strength across the depth of products, the breadth and depth of products, it's going to keep driving that ARR, in the near term it's going to be about $15 million per year, and we're hoping that's going to accelerate. Mike Latimore: Great, and then just on the supply chain shortages that are out there, you know, sort of absent those constraints, how much higher might the revenues be in terms of the guidance here. Rick Smith: So we've already factored in the supply chain constraints, as Luke talked about, we spent a lot of time internally trying to mitigate those risks and making sure that it's not going to disrupt operations. And the guidance that we've given reflects any potential disruption we might see from supply chain. Mike Latimore: I guess I was wondering if there's without the supply chain how much higher might have that been? Rick Smith: Yes, what we've got to do is what we've got to do and then we're going to. Andrea James: Yes, Mike. I would just say the guidance reflects a number of factors supply chains, one our demand pipelines another one that there's a number of factors that we take into account in the guidance. Mike Latimore: Thanks. Operator: Ryan Kimbrel, we've got you. Let's take our next question; Ryan Kimbrel from Craig-Hallum. I'm sorry, Ryan, it's our first time talking to you. Hi, welcome. Ryan Kimbrel: Okay, right. Just one for me, I just wanted to touch on conversion rates. I'm not sure what detail you track conversion, but I'm wondering how that's trended over the last say year and a half and you know if you want to be more general and be started to convert more of those quality leads as your customers budget situation has become a little bit healthier? Rick Smith: So, thanks for the question, Ryan. I think we're not going to disclose too much on conversion rates other than to say of whenever there's an opportunity for body cams, cloud, TASERs, dams, RMS or CAD, we expect to be competitive. It's a very, very competitive market. There's a lot of vendors in it. But we do our best to position our products in a way that the customer will value the most and certainly we expect to win, we want to win. We've got a competitive team and that's the tone we want to set. Ryan Kimbrel: All right, fair enough. Thanks, guys. And congrats, again. Andrea James: Okay, wondering if any of you guys have hopped back into the kill. So go ahead and use the hand race feature. Give me a second here. Now, are we good to go. Okay, great. We'll have Rick, close this out. Rick Smith: All right. Thanks, everybody. It was pretty fun doing this from the fleet vehicle. It was not planned, but we were at a customer site and the customer wanted to keep going and I think it was the right call. So this was an unexpected benefit. We appreciate the new faces. We appreciate those who've been with us for a while. Obviously, the business is really doing well and we're excited to see what happens in the back half of the years, Josh and his team continue to go out and bring in the revenue and our development teams keep launching products, and the new products are scaling. There's a lot of great stuff going on, lot of positive energy. And we'll look forward to seeing you all on our next quarterly zoom. So everybody stay safe. And let's get this delta variant behind us to get back to normal and we can. Thanks, everybody.
Axon Enterprise (NASDAQ:AXON) Maintains "Hold" Rating Amid Market Volatility
- Barclays maintains a "Hold" rating for Axon Enterprise (NASDAQ:AXON), with the stock currently priced at $515.45.
- The company's transition to a subscription model enhances revenue predictability despite being considered overvalued in the short term.
- Axon faces challenges such as significant market volatility, antitrust risks, and competition, notably from Motorola.
Axon Enterprise, listed on the NASDAQ as AXON, is a key player in the law enforcement technology sector. The company is known for its comprehensive product ecosystem, which includes hardware, software, and cloud services. Axon has made significant strides in wearable cameras and cloud-based evidence management, positioning itself as a leader in the industry. However, it faces competition from companies like Motorola.
On March 10, 2025, Barclays maintained its "Hold" rating for AXON, with the stock priced at $515.45. This decision comes amid significant interest from smart money in AXON options, as highlighted by Benzinga. Despite the stock's current price reflecting a 2.08% decrease, it remains a focal point for investors due to its robust business model and recurring revenue stream.
Axon's transition to a subscription model has enhanced revenue predictability, a crucial factor for investors. However, the company's shares are currently considered overvalued, which could impact its short-term growth. The stock has fluctuated between $501.85 and $521.81 today, with a market capitalization of approximately $39.5 billion, indicating its substantial presence in the market.
The company's stock has experienced significant volatility over the past year, reaching a high of $715.99 and a low of $273.52. This volatility, coupled with antitrust risks and competition from Motorola, presents challenges for Axon's growth. Despite these hurdles, the company's innovative approach and strong market position continue to attract investor interest.
With a trading volume of 1,357,959 shares, AXON remains an active player on the NASDAQ exchange. The company's focus on integrating hardware, software, and cloud services has been a key driver of its success. However, investors should remain cautious of potential antitrust issues and competitive pressures that could affect Axon's future performance.
Axon Enterprise, Inc. (NASDAQ:AXON) Earnings Preview: Strong Growth Expected
- Earnings per Share (EPS) and revenue growth are anticipated to be significant, with a 34.8% increase in EPS and a 31.3% increase in revenue year-over-year.
- The company's valuation metrics demonstrate high investor confidence, with a P/E ratio of approximately 130.23.
- Financial stability is indicated by a low debt-to-equity ratio of 0.34 and a strong current ratio of about 2.96.
Axon Enterprise, Inc. (NASDAQ:AXON) is a leading provider of public safety technology, known for its development of TASER devices and body cameras. The company is set to release its fourth-quarter 2024 earnings on February 25, 2025. Analysts are closely watching the earnings per share (EPS) and revenue figures, which are key indicators of the company's financial health.
Wall Street analysts estimate Axon's EPS to be $1.37, while the Zacks Consensus Estimate is slightly higher at $1.51. This represents a significant 34.8% increase from the previous year, highlighting the company's strong performance. Revenue projections also show growth, with estimates around $566.7 million to $567.6 million, marking a 31.3% year-over-year increase.
For the entire year of 2024, Axon's revenue is projected to reach $2.08 billion, a 32.8% increase from the previous year. The consensus estimate for annual EPS is $5.29, reflecting a 27.8% rise. Axon's consistent track record of exceeding earnings expectations may influence investor decisions, as highlighted by Zacks.
Axon's valuation metrics indicate a high level of investor confidence. The company's P/E ratio is approximately 130.23, suggesting investors are willing to pay over 130 times its earnings. The price-to-sales ratio is about 20.16, and the enterprise value to sales ratio is similar at 20.17, reflecting the company's strong market position.
The company's financial stability is further supported by a debt-to-equity ratio of 0.34, indicating low debt levels. Axon's current ratio of about 2.96 shows strong liquidity, ensuring it can cover short-term liabilities. These factors contribute to the company's robust financial health and investor appeal.
Axon Enterprise Target Raised to $645 Amid AI Momentum and Strong Software Growth
Raymond James analysts raised the price target for Axon Enterprise (NASDAQ:AXON) to $645 from $515, maintaining an Outperform rating on the stock. The revision reflects continued confidence in the company’s strong growth trajectory, driven by its strategic shift toward software and artificial intelligence, despite a recent pullback in the stock.
Axon shares have surged over 240% in the past two years and 130% in 2024, underscoring investor enthusiasm for the company’s transformation and innovative offerings. However, the stock recently dipped approximately 20%, likely due to profit-taking, valuation concerns, and elevated expectations for its fourth-quarter 2024 results and 2025 guidance. This decline, the analysts argue, presents a compelling entry point for investors.
Axon’s increasing emphasis on software and AI positions it well for continued growth. The analysts anticipate positive estimate revisions with the company’s upcoming earnings report, highlighting Axon’s accelerating cloud revenue. Raymond James’ revised model projects cloud-related revenue reaching $1.5 billion by 2026, a $103 million increase from previous estimates and approximately $200 million above consensus. Total sales are forecast to hit $3.16 billion, exceeding the Street’s projections by $72 million.
Axon Enterprise's Recent Stock Activity and Strategic Moves
- Kalinowski Caitlin Elizabeth, a director at Axon Enterprise, sold 450 shares at $604.07 each, leaving her with 6,929 shares.
- Axon's acquisition of Dedrone enhances its capabilities in airspace protection, indicating a strategic move into new markets.
- Despite a slight decline upon joining the Nasdaq 100 Index, Axon's stock shows signs of recovery with a current price increase of 0.37%.
On January 2, 2025, Kalinowski Caitlin Elizabeth, a director at NASDAQ:AXON, sold 450 shares of the company's common stock at $604.07 each. This transaction leaves her with 6,929 shares. Axon Enterprise, known for its TASERS, body cameras, and cloud services, is performing well in its core business areas, as highlighted by its recent strategic moves.
Axon recently acquired Dedrone, enhancing its capabilities in airspace protection against drones. This acquisition allows Axon to enter new markets, potentially increasing profitability. The company's focus on innovative technologies like artificial intelligence and augmented reality further strengthens its position in the public safety sector, as discussed by President Josh Isner in a podcast with Motley Fool.
Despite these advancements, Axon's stock faced a decline on its first day as a member of the Nasdaq 100 Index, alongside Palantir and MicroStrategy. This initial drop presents a challenge for the company in the prestigious index. However, the current stock price of $596.49 shows a slight increase of 0.37% or $2.17, indicating some recovery.
Axon's stock has fluctuated today between $588.20 and $612.25, with a market capitalization of approximately $45.49 billion. Over the past year, the stock has seen a high of $698.67 and a low of $241.72. The trading volume on the NASDAQ exchange is 516,451 shares, reflecting active investor interest in the company.
Axon Enterprise, Inc. (NASDAQ:AXON) Stock Analysis
- High Valuation Indicators: Axon's P/E ratio of 161.33 and price-to-sales ratio of 24.97 suggest a high market valuation and strong investor confidence in future growth.
- Strong Financial Health: A debt-to-equity ratio of 0.32 and current ratio of 2.96 indicate prudent debt management and solid liquidity.
- Executive Stock Sale: Despite a significant stock sale by Chief Product Officer Jeffrey C. Kunins, his continued substantial holding reflects ongoing investment in Axon's success.
Axon Enterprise, Inc. (NASDAQ:AXON) is a leading provider of public safety technology solutions, known for its development of TASER devices and body cameras. The company operates in a competitive landscape, with rivals like Motorola Solutions and Digital Ally. On December 17, 2024, Kunins Jeffrey C, Axon's Chief Product Officer and Chief Technology Officer, sold 470 shares of the company's common stock at approximately $635.24 each. Despite this sale, he still holds 126,850 shares, reflecting his continued investment in the company.
Wall Street analysts currently view Axon as a favorable investment opportunity. These analysts' recommendations can significantly influence stock prices, as investors often rely on their insights to make informed decisions. However, the impact of these recommendations is a topic of debate among investors, as highlighted by the media. Axon's high price-to-earnings (P/E) ratio of 161.33 suggests a high valuation relative to its earnings, indicating strong market confidence in its future growth prospects.
Axon's price-to-sales ratio of 24.97 and enterprise value to sales ratio of 24.99 suggest that investors are willing to pay a premium for the company's sales. This reflects the market's positive outlook on Axon's ability to generate revenue. Additionally, the enterprise value to operating cash flow ratio of 162.67 highlights a significant premium on its cash flow generation, indicating strong investor confidence in the company's financial health.
The company's earnings yield is relatively low at 0.62%, which is the inverse of the P/E ratio and indicates the return on investment for shareholders. Despite this low yield, Axon's conservative debt-to-equity ratio of 0.32 suggests a prudent approach to leveraging debt in its capital structure. This conservative use of debt, combined with a strong liquidity position indicated by a current ratio of 2.96, underscores Axon's ability to cover short-term liabilities with its short-term assets, ensuring financial stability.
Axon Enterprise, Inc. (NASDAQ:AXON) Financial Overview and Stock Sale by Director
- Matthew R. McBrady, a director at Axon, sold 121 shares at approximately $600.85 each, following a strong third-quarter earnings report.
- Axon's financial performance showcases record revenue and net income, with a focus on Taser devices, body cameras, and software solutions for law enforcement.
- Despite a high price-to-earnings (P/E) ratio of 154.74 and other valuation metrics, Axon's innovative AI tools and international opportunities support optimistic long-term growth prospects.
Axon Enterprise, Inc. (NASDAQ:AXON) is a leading provider of public safety technology, best known for its Taser devices and body cameras. The company also offers a range of software solutions for law enforcement agencies. Axon competes with companies like Motorola Solutions and Digital Ally in the public safety technology sector.
On November 20, 2024, Matthew R. McBrady, a director at Axon, sold 121 shares of the company's common stock at approximately $600.85 each. This transaction comes on the heels of Axon's strong third-quarter earnings report, which has driven the stock price to around $600 per share. McBrady now holds 4,771 shares of Axon.
Axon's recent financial performance is impressive, with record revenue and net income from its Taser business and software segment. The company's innovative AI tools and international opportunities are expected to support its long-term growth. Despite a high price-to-earnings (P/E) ratio of 154.74, investors remain optimistic about Axon's future.
The company's price-to-sales ratio of 23.95 and enterprise value to sales ratio of 23.97 reflect a high market valuation relative to its revenue. These metrics indicate that investors are willing to pay a premium for Axon's growth potential. The enterprise value to operating cash flow ratio of 156.04 further underscores the company's high valuation.
Axon's financial health is strong, with a debt-to-equity ratio of 0.34, indicating low debt levels compared to equity. The current ratio of 2.96 suggests that Axon can comfortably cover its short-term liabilities with its short-term assets. Despite an earnings yield of 0.65%, the company's growth prospects make it a hold for investors.
JMP Securities Upgrades AXON to Outperform with Increased Price Target
JMP Securities Upgrades AXON:Nasdaq to Outperform
JMP Securities recently upgraded AXON to Outperform, signaling a positive shift in their perspective towards Axon Enterprise's stock. This upgrade, as reported by TheFly, comes with an increased price target of $375, up from the previous $320. This adjustment is a clear indication of JMP Securities' confidence in AXON's potential for growth and their belief in the company's future financial performance. At the time of the announcement, AXON's stock price stood at $313.66, reflecting the market's anticipation and reaction to the company's prospects.
The upgrade by JMP Securities aligns with AXON's recent market performance, which has shown resilience and potential for growth. Despite a slight depreciation of 1.49% over the past month, AXON has outperformed the broader Industrial Products sector and the S&P 500, which saw losses of 2.63% and 2%, respectively. This performance is particularly noteworthy in a challenging market environment, highlighting AXON's strength and stability relative to its peers and the broader market.
Furthermore, AXON's recent trading activity and financial metrics provide additional context to JMP Securities' optimistic outlook. The company's stock has been trading between $309.20 and $314.78, with a peak price over the past year of $329.87. This trading range underscores the stock's volatility but also its potential for significant growth, as evidenced by its peak price. With a market capitalization of approximately $23.67 billion and a trading volume of 590,668 shares on the NASDAQ exchange, AXON demonstrates substantial market presence and investor interest.
The anticipation surrounding AXON's upcoming earnings report on May 6, 2024, further supports JMP Securities' positive stance. Analysts expect Axon Enterprise to report earnings of $0.97 per share, representing a year-over-year growth of 10.23%. Additionally, revenue predictions stand at approximately $437 million, suggesting strong financial performance and potential for continued growth. These expectations, if met or exceeded, could further validate JMP Securities' upgrade and reinforce confidence in AXON's market position and financial health.
Overall, JMP Securities' decision to upgrade AXON to Outperform, coupled with the company's recent market performance and upcoming financial expectations, paints a promising picture for Axon Enterprise. The increased price target and positive outlook reflect a belief in the company's growth potential, driven by its innovative products like stun guns and body cameras, and its ability to navigate market challenges. As AXON continues to perform and meet its financial targets, it remains a stock to watch for investors seeking growth opportunities in the technology and security sectors.
