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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on AXON

Axon Enterprise's recent performance was negatively impacted by a Q3 earnings miss, largely attributed to increased R&D spending and tariffs. The company's adjusted EPS fell short of expectations, despite a 30.6% year-over-year sales growth. Weak margins and a steep earnings miss led to a significant decline. Additionally, the acquisition of Prepared, an AI-powered 911 communication company, raised investor concerns about its impact on expenses. Analysts' reduced price targets further contributed to the downward trend.

1.c. Company Highlights

2. Axon Delivers Strong Q3 2025 Results, Driven by Software and Services Growth

Axon's third-quarter 2025 financial performance was robust, with revenue reaching $711 million, representing a 31% year-over-year increase. The software and services segment was the primary driver, growing 41% year-over-year to $305 million. Adjusted gross margin stood at 62.7%, a 50 basis point decrease from the previous year, while adjusted EBITDA margin was 24.9%. Earnings per share (EPS) came in at $1.17, below estimates of $1.52. As Brittany Bagley noted, "We're proud of our third quarter results, which reflect strong execution across our products and markets."

Publication Date: Nov -11

📋 Highlights
  • Revenue Growth:: Q3 2025 revenue was $711 million, up 31% YoY; software and services revenue reached $305 million, a 41% YoY increase.
  • Adjusted EBITDA Margin:: Maintained 25% adjusted EBITDA margin despite tariffs and increased R&D investments, meeting the annual target.
  • Acquisitions & Expansion:: Aiming to close acquisitions of Prepared (AI call assistant) and Carbyne (cloud 911 infrastructure) in early 2026 to disrupt emergency response systems.
  • International & Federal Momentum:: Strong international deal growth, with Q4 expected as the best federal quarter, unaffected by government shutdown risks.
  • Long-Term Contracts & Bookings:: Year-to-date bookings grew >30% YoY, driven by 10-year contracts and a $3 billion annualized revenue trajectory.

Segment Performance

The software and services segment continues to be a significant growth driver for Axon, with a 41% year-over-year increase. This growth is expected to continue, driven by the company's expanding product portfolio and increasing adoption across its customer base. The acquisition of Prepared and Carbyne is expected to further enhance Axon's capabilities in the 911 space, providing a more comprehensive and integrated solution for customers.

Valuation Metrics

Axon's valuation metrics indicate a high-growth profile, with a Price-to-Sales (P/S) Ratio of 18.04 and an EV/EBITDA ratio of 150.57. The Price-to-Earnings (P/E) Ratio stands at 178.34, suggesting that the market has high expectations for the company's future growth. Analysts estimate next year's revenue growth at 25.4%, which may justify some of the premium valuation. However, the high valuation multiples also imply that any disappointment in growth or profitability could lead to a significant correction.

Growth Prospects

Axon's growth prospects are driven by its expanding product portfolio, increasing adoption across its customer base, and strategic acquisitions. The company's focus on creating a comprehensive ecosystem that ties together body cameras, Fusus, and other solutions is expected to drive long-term growth. As Joshua Isner noted, "We're executing against a growing pipeline, and we have line of sight to close out the year even stronger."

Margin Profile

Axon's margin profile is expected to be influenced by its product mix, with tailwinds from software and adjustments due to tariffs and new investments. The company is committed to a 25% adjusted EBITDA margin for the year, and management expects to see tailwinds in gross margin from the software business over time. As Brittany Bagley discussed, "The impact of tariffs on the connected devices business is a one-time adjustment."

3. NewsRoom

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Axon Plunges 31.1% in 6 Months: Should You Hold or Fold the Stock?

Dec -04

Source:

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3 Growth Beasts That Have Beaten the Market in 8 of the Past 10 Years

Dec -04

Source: fool.com

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Axon Stock Faces Steep Valuation Risk: Could It Fall Another 30%?

Dec -03

Source: forbes.com

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Axon Vision Announce Strategic Cooperation Agreement with Leonardo DRS to Deliver AI-Enhanced Counter-UAS Solutions for U.S. Market

Dec -03

Source: prnewswire.com

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Can Axon Maintain EBITDA Margin Momentum Amid Cost Pressures?

Dec -02

Source: zacks.com

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Has Axon Stock Been Good for Investors?

Nov -29

Source: fool.com

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AXON's Software & Services Growth Picks Up: Can the Momentum Sustain?

Nov -27

Source: zacks.com

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Virtus Silvant Mid-Cap Growth Fund Q3 2025 Performance Review

Nov -26

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.55%)

6. Segments

Software and Sensors

Expected Growth: 10.93%

Axon Enterprise's Software and Sensors segment growth of 10.93% is driven by increasing demand for digital evidence management, body-worn cameras, and sensor-enabled devices. Growing adoption of cloud-based solutions, expansion into new markets, and strategic partnerships also contribute to the segment's growth.

TASER

Expected Growth: 9.95%

TASER's 9.95% growth driven by increasing demand for non-lethal law enforcement solutions, expansion into new markets, and growing adoption of Axon's body-worn cameras and Evidence.com software. Strong brand recognition, strategic partnerships, and continuous innovation in AI-powered public safety technology also contribute to the segment's growth.

7. Detailed Products

TASER Conducted Electrical Weapons (CEWs)

A non-lethal weapon used by law enforcement to incapacitate dangerous individuals, while minimizing the risk of serious injury or death.

Axon Body 3 Camera

A rugged, waterproof, and Wi-Fi enabled body-worn camera designed for law enforcement and public safety professionals.

Axon Fleet 3 In-Car Video System

A rugged, high-definition in-car video system designed for law enforcement vehicles, providing a clear and reliable video recording of traffic stops and other incidents.

Evidence.com

A cloud-based digital evidence management system that allows agencies to securely store, manage, and share digital evidence.

Axon Records

A cloud-based records management system that allows agencies to manage and analyze incident reports, officer activity, and other data.

8. Axon Enterprise, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Axon Enterprise, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.

Bargaining Power Of Customers

Axon Enterprise, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often critical to its customers' operations, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Axon Enterprise, Inc. relies on a few key suppliers for critical components, which gives these suppliers some bargaining power. However, the company's size and scale of operations mitigate this risk to some extent.

Threat Of New Entrants

The barriers to entry in Axon Enterprise, Inc.'s industry are relatively high, including significant capital expenditures and regulatory hurdles. This limits the threat of new entrants.

Intensity Of Rivalry

Axon Enterprise, Inc. operates in a highly competitive industry with several established players, leading to intense rivalry. The company must continually innovate and improve its products to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.76%
Debt Cost 3.95%
Equity Weight 70.24%
Equity Cost 8.48%
WACC 7.13%
Leverage 42.36%

11. Quality Control: Axon Enterprise, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Huntington Ingalls

A-Score: 5.3/10

Value: 4.7

Growth: 4.2

Quality: 5.0

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Woodward

A-Score: 5.0/10

Value: 1.1

Growth: 5.6

Quality: 6.7

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Textron

A-Score: 4.9/10

Value: 5.5

Growth: 5.9

Quality: 5.2

Yield: 0.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
BWXT

A-Score: 4.7/10

Value: 0.2

Growth: 6.3

Quality: 5.3

Yield: 1.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Axon Enterprise

A-Score: 4.6/10

Value: 0.0

Growth: 9.6

Quality: 5.1

Yield: 0.0

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
AAR

A-Score: 4.4/10

Value: 4.5

Growth: 4.9

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

554.17$

Current Price

554.17$

Potential

-0.00%

Expected Cash-Flows