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The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 61.1%.
The consensus estimate for the company’s fourth-quarter 2023 revenues is pegged at $419 million, suggesting an increase of 24.7% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at 48 cents per share, indicating a 33.3% increase from the year-ago quarter’s reported number.
Let’s see how things have shaped up for Axon this earnings season.
Factors to Note
Axon’s TASER segment’s fourth-quarter 2023 performance is expected to have gained from strong demand for TASER devices and higher cartridge revenues. Also, segmental performance is likely to have reflected strong sales from virtual reality training services. However, reduced demand for Axon’s legacy TASER 7-series has been partly affecting the performance of the TASER segment. The Zacks Consensus Estimate for the TASER segment’s gross margin in the fourth quarter is pegged at $103 million, increasing 1% sequentially.
The Software & Sensors segment is expected to have generated higher revenues in the to-be-reported quarter supported by the addition of new users and associated devices to the AXON network. Strong momentum in Axon Evidence and cloud services, driven by an increase in the aggregate number of users, average revenue per user and software add-ons are also likely to have driven segmental revenues.
The company has been witnessing strong customer response for its newly launched next-generation body-worn camera, Axon Body 4, which is also expected to have driven the segment’s performance. The consensus mark for Software & Sensors net sales is pegged at $258 million, increasing 2.8% sequentially. Also, the Zacks Consensus Estimate for the segment’s gross margin in the fourth quarter is pegged at $157 million, increasing 2% sequentially.
However, the escalating cost of sales due to raw material cost inflation is likely to have weighed on AXON’s bottom line in the to-be-reported quarter.
The company has been investing heavily in product innovation for some time now. For instance, in the first nine months of 2023, the company incurred research and development expenses of $219.7 million, up 33.1% year over year. Hefty investments in research and development are likely to have adversely affected the company’s performance.
The company’s international presence keeps it exposed to the risk of adverse currency fluctuations, which are likely have hurt its performance in the to-be-reported quarter.
Our proven model does not conclusively predict an earnings beat for AXON this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.
Earnings ESP: Axon has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 86 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Axon presently carries a Zacks Rank #4 (Sell).
Highlights of Q3 Earnings
Axon reported third-quarter 2023 earnings of $1.02 per share. The bottom line increased significantly year over year despite a 33.6% jump in the cost of sales. Total revenues of $413.6 million outperformed the Zacks Consensus Estimate of $393.8 million and augmented 32.7% year over year. The top line benefited from strength in Axon Cloud software, demand for Axon Fleet systems and the ramp-up of TASER 10 and Axon Body 4.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year. Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year. The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year.
Stock to Consider
Here is a company within the broader Industrial Products sector, which according to our model, has the right combination of elements to beat on earnings.
The company is slated to release fourth-quarter 2023 results on Feb 27. Sealed Air’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, the average beat being 9.3%.
Image: Bigstock
AXON Gears Up to Report Q4 Earnings: What's in the Cards?
Axon Enterprise, Inc. (AXON - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 27, after market close.
The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 61.1%.
The consensus estimate for the company’s fourth-quarter 2023 revenues is pegged at $419 million, suggesting an increase of 24.7% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at 48 cents per share, indicating a 33.3% increase from the year-ago quarter’s reported number.
Let’s see how things have shaped up for Axon this earnings season.
Factors to Note
Axon’s TASER segment’s fourth-quarter 2023 performance is expected to have gained from strong demand for TASER devices and higher cartridge revenues. Also, segmental performance is likely to have reflected strong sales from virtual reality training services. However, reduced demand for Axon’s legacy TASER 7-series has been partly affecting the performance of the TASER segment. The Zacks Consensus Estimate for the TASER segment’s gross margin in the fourth quarter is pegged at $103 million, increasing 1% sequentially.
The Software & Sensors segment is expected to have generated higher revenues in the to-be-reported quarter supported by the addition of new users and associated devices to the AXON network. Strong momentum in Axon Evidence and cloud services, driven by an increase in the aggregate number of users, average revenue per user and software add-ons are also likely to have driven segmental revenues.
The company has been witnessing strong customer response for its newly launched next-generation body-worn camera, Axon Body 4, which is also expected to have driven the segment’s performance. The consensus mark for Software & Sensors net sales is pegged at $258 million, increasing 2.8% sequentially. Also, the Zacks Consensus Estimate for the segment’s gross margin in the fourth quarter is pegged at $157 million, increasing 2% sequentially.
However, the escalating cost of sales due to raw material cost inflation is likely to have weighed on AXON’s bottom line in the to-be-reported quarter.
The company has been investing heavily in product innovation for some time now. For instance, in the first nine months of 2023, the company incurred research and development expenses of $219.7 million, up 33.1% year over year. Hefty investments in research and development are likely to have adversely affected the company’s performance.
The company’s international presence keeps it exposed to the risk of adverse currency fluctuations, which are likely have hurt its performance in the to-be-reported quarter.
Axon Enterprise, Inc Price and Consensus
Axon Enterprise, Inc price-consensus-chart | Axon Enterprise, Inc Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AXON this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.
Earnings ESP: Axon has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 86 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Axon presently carries a Zacks Rank #4 (Sell).
Highlights of Q3 Earnings
Axon reported third-quarter 2023 earnings of $1.02 per share. The bottom line increased significantly year over year despite a 33.6% jump in the cost of sales. Total revenues of $413.6 million outperformed the Zacks Consensus Estimate of $393.8 million and augmented 32.7% year over year. The top line benefited from strength in Axon Cloud software, demand for Axon Fleet systems and the ramp-up of TASER 10 and Axon Body 4.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year. Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year. The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year.
Stock to Consider
Here is a company within the broader Industrial Products sector, which according to our model, has the right combination of elements to beat on earnings.
Sealed Air Corporation (SEE - Free Report) has an Earnings ESP of +3.46% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release fourth-quarter 2023 results on Feb 27. Sealed Air’s earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, the average beat being 9.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.