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Axon (AXON) Down 11.7% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Axon Enterprise (AXON - Free Report) . Shares have lost about 11.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Axon due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Axon Enterprise Q1 Earnings & Revenues Top Estimates

Axon Enterprise reported first-quarter 2024 adjusted earnings of $1.15 per share, which surpassed the Zacks Consensus Estimate of 97 cents. The bottom line increased 30.7% year over year despite a significant rise in the cost of sales.

Total revenues of $460.7 million outperformed the Zacks Consensus Estimate of $438 million and increased 34.3% year over year. The top line benefited from continued strength in Axon Cloud & Services, increasing adoption of TASER 10 driving growth in TASER devices and cartridges, and the adoption of Axon Body 4.

Segmental Details in Q1

Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 51.5% to $176.5 million. The uptick was driven by user growth and increasing adoption of premium add-on features related to Axon Evidence, real-time operations and productivity software. Axon Cloud’s gross margin deteriorated to 72.8% from 73.2% in the year-ago period due to increased stock-based compensation expense related to vesting events from a one-time enhanced equity compensation program and amortization expense of acquired intangible assets.

Sensors & Other revenues climbed 14.3% to $105.5 million driven by increased demand for Axon Body cameras and accessories. The gross margin improved to 38.7% from 38.2% in the year-ago period supported by improvement from manufacturing overhead reallocations made in the second quarter of 2023.

TASER: The segment’s revenues jumped 33.1% year over year to $178.7 million, driven by growth in professional devices and cartridges, associated with rising volumes of TASER 10 and Evidence & Cloud services, supported by increased connected devices in the field and growing adoption of VR products.

Total operating expenses climbed 30% year over year to $243.8 million. The gross margin declined to 56.4% from 59.5% in the year-ago period.

Balance Sheet & Cash Flow

At the end of the first quarter, Axon had cash and cash equivalents of $403.9 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $32.5 million compared with $33.6 million in 2023 end.

In the first three months of 2024, it spent net cash of $15.9 million on operating activities compared with $56.3 million cash spent a year ago.

Adjusted free cash outflow was $26.1 million in the first three months of 2024 compared with $60.1 million cash outflow in the prior year.


For 2024, Axon Enterprise expects revenues in the range of $1.94-$1.99 billion, indicating approximately 26% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $430-$445 million with a continued margin expansion from 2023.

The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion.

It anticipates stock-based compensation expenses in the range of $215-$230 million for the year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Axon has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Axon is part of the Zacks Security and Safety Services industry. Over the past month, ADT (ADT - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended March 2024 more than a month ago.

ADT reported revenues of $1.21 billion in the last reported quarter, representing a year-over-year change of -25%. EPS of $0.16 for the same period compares with $0.12 a year ago.

ADT is expected to post earnings of $0.17 per share for the current quarter, representing a year-over-year change of +6.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

ADT has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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