Axon Enterprise Stock: Taser Owner Tops $300 On Strong Demand, Outlook

On March 13, the Puerto Rico Police Bureau extended its partnership with Axon Enterprise (AXON), a leader in public safety innovation, to supply its police officers with the Axon Body 4 body-worn cameras. The deal follows last year’s implementation of Axon’s Axon Body 3 cameras along with Axon Fleet 3 in-car cameras for first responders.   

The contract expansion can be seen as the latest example of growing global police force demand for modern technologies to keep first responders and citizens safe. 

Following numerous gun-related fatalities involving law enforcement and civilians, there’s increasing pressure on police departments to adopt technologies and training aimed at reducing these incidents. Many US-based federal, state, and local law enforcement entities have turned to Axon for its Taser stun guns, cameras, and other devices. In turn, the company has amassed more than 17,000 customers to become the market leader in public safety technologies.  

From 2020 to 2023, Axon experienced a 32% annualized growth in revenue, mostly driven by its subscription-based cloud software and services. These subscriptions represented 95% of the company’s total revenue in 2023. The recurring revenue profile significantly contributed to the stock’s appeal to investors. 

AXON Is On Pace To Finish Higher For The 9th Straight Year 

Axon stock is up around 25% in 2024 and should momentum sustain, the stock is poised to achieve higher finishes for the ninth consecutive year. Notably, 2022 was a challenging year for US equities, highlighted by a nearly 20% fall in the S&P 500 index. However, Axon stood out among the losers with a nearly 6% return. This gain was attributed to increased police investments amid rising community violence.  

Over the past five years, Axon’s shares have seen an annualized return of 43.0%, vastly outperforming the aerospace and defense industry’s 5.1% increase. This discrepancy highlights Axon’s exceptional growth, further evidenced by a 31% revenue increase to a record $1.56 billion in 2023, with expectations for continued growth.   

Early Mover In A $63 Billion Global Market 

Axon reported fourth quarter and full year fiscal 2023 results on February 13. The company disclosed a 29% year-over-year increase in its fourth-quarter revenue at $432 million. This growth was fuelled by a 47% rise in annual recurring revenues, thanks to enhanced sales of premium software bundles and connected devices. 

Additionally, Axon’s earnings per share surged by 32% to $1.12, surpassing consensus estimates for the twelfth consecutive quarter. With the forecast of sustained demand for its products, the company predicts a 20% to 24% revenue increase in 2024, aiming for up to $1.94 billion. By 2025, revenue is expected to hit $2 billion, a figure that could be conservative given Axon’s track record of exceeding expectations. 

Looking forward, Axon hopes to further capitalize recent moment within the $63 billion market that serves law enforcement, military, and civilian sectors. The company’s growth trajectory is poised for expansion with the introduction of new drones, virtual reality training devices, and the Axon Respond security platform, diversifying its product offerings.  

Despite its remarkable success, the consensus among Wall Street analysts remains positive, with nine out of ten endorsing a buy rating for the stock.