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Here's Why You Should Retain Axon Enterprise Stock in Your Portfolio
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Axon Enterprise, Inc. (AXON - Free Report) is thriving on the back of strong demand for TASER devices and virtual reality training services. Growth in cartridge revenues, driven by higher adoption of the TASER 10 products, has also been driving the TASER segment’s performance. The segment’s revenues increased 33.4% year over year in 2024.
The addition of new users and associated devices to the Axon network is aiding the Software & Sensors segment. After witnessing a year-over-year 44% jump in revenues in 2023, revenues from the segment also increased 33.4% in 2024. Increased demand for cloud-connected TASER devices in the field, driven by growing adoption of software applications, is driving Axon Evidence and cloud services’ growth within the segment.
Driven by strength across its businesses, AXON provided bullish guidance for 2025. It expects to generate revenues in the range of $2.55-$2.65 billion, indicating growth of 25% at the midpoint on a year-over-year basis.
Management remains focused on acquiring businesses to gain access to new customers, regions and product lines. The company’s acquisition of Sky-Hero (July 2023) expanded its Axon Air portfolio, which consists of the drone software and hardware portfolio. Also, in January 2024, it acquired Fusus, a leader in real-time crime center technology. The combination of Fusus’ real-time situational awareness expertise with Axon Enterprise’s public safety technology is likely to enable the latter to boost its product portfolio.
AXON's Price Performance
Image Source: Zacks Investment Research
Over the past six months, the Zacks Rank #3 (Hold) company’s shares have risen 41.7% compared with the industry’s 7.1% growth.
However, escalating costs and expenses have remained a concern for Axon Enterprise over the past few quarters. In 2024, the company’s cost of sales soared 39% year over year. The metric, as a percentage of sales, was 40.4%, up 160 basis points year over year. The company incurred high costs and expenses related to business integration activities, an increase in headcount and higher wages and stock-based compensation expenses.
Also, the company’s selling, general and administrative expenses increased 49.8% year over year in the year. The increase in operating expenses has been adversely impacting margins. In 2024, the gross margin declined 160 basis points year over year.
Key Picks
Some better-ranked stocks from the same space are discussed below.
TDG delivered a trailing four-quarter average earnings surprise of 6.5%. In the past 60 days, the Zacks Consensus Estimate for Transdigm’s fiscal 2025 (ending September 2025) earnings has inched up 0.2%.
Triumph Group (TGI - Free Report) currently carries a Zacks Rank of 2. TGI delivered a trailing four-quarter average earnings surprise of 159.3%. In the past 60 days, the consensus estimate for fiscal 2025 (ending March 2025) earnings has increased 3%.
Woodward (WWD - Free Report) presently carries a Zacks Rank of 2. WWD delivered a trailing four-quarter average earnings surprise of 17.9%. In the past 60 days, the Zacks Consensus Estimate for fiscal 2025 (ending September 2025) earnings has increased 2.3%.
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Here's Why You Should Retain Axon Enterprise Stock in Your Portfolio
Axon Enterprise, Inc. (AXON - Free Report) is thriving on the back of strong demand for TASER devices and virtual reality training services. Growth in cartridge revenues, driven by higher adoption of the TASER 10 products, has also been driving the TASER segment’s performance. The segment’s revenues increased 33.4% year over year in 2024.
The addition of new users and associated devices to the Axon network is aiding the Software & Sensors segment. After witnessing a year-over-year 44% jump in revenues in 2023, revenues from the segment also increased 33.4% in 2024. Increased demand for cloud-connected TASER devices in the field, driven by growing adoption of software applications, is driving Axon Evidence and cloud services’ growth within the segment.
Driven by strength across its businesses, AXON provided bullish guidance for 2025. It expects to generate revenues in the range of $2.55-$2.65 billion, indicating growth of 25% at the midpoint on a year-over-year basis.
Management remains focused on acquiring businesses to gain access to new customers, regions and product lines. The company’s acquisition of Sky-Hero (July 2023) expanded its Axon Air portfolio, which consists of the drone software and hardware portfolio. Also, in January 2024, it acquired Fusus, a leader in real-time crime center technology. The combination of Fusus’ real-time situational awareness expertise with Axon Enterprise’s public safety technology is likely to enable the latter to boost its product portfolio.
AXON's Price Performance
Image Source: Zacks Investment Research
Over the past six months, the Zacks Rank #3 (Hold) company’s shares have risen 41.7% compared with the industry’s 7.1% growth.
However, escalating costs and expenses have remained a concern for Axon Enterprise over the past few quarters. In 2024, the company’s cost of sales soared 39% year over year. The metric, as a percentage of sales, was 40.4%, up 160 basis points year over year. The company incurred high costs and expenses related to business integration activities, an increase in headcount and higher wages and stock-based compensation expenses.
Also, the company’s selling, general and administrative expenses increased 49.8% year over year in the year. The increase in operating expenses has been adversely impacting margins. In 2024, the gross margin declined 160 basis points year over year.
Key Picks
Some better-ranked stocks from the same space are discussed below.
Transdigm Group (TDG - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TDG delivered a trailing four-quarter average earnings surprise of 6.5%. In the past 60 days, the Zacks Consensus Estimate for Transdigm’s fiscal 2025 (ending September 2025) earnings has inched up 0.2%.
Triumph Group (TGI - Free Report) currently carries a Zacks Rank of 2. TGI delivered a trailing four-quarter average earnings surprise of 159.3%. In the past 60 days, the consensus estimate for fiscal 2025 (ending March 2025) earnings has increased 3%.
Woodward (WWD - Free Report) presently carries a Zacks Rank of 2. WWD delivered a trailing four-quarter average earnings surprise of 17.9%. In the past 60 days, the Zacks Consensus Estimate for fiscal 2025 (ending September 2025) earnings has increased 2.3%.