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Axon Enterprise (AAXN) Q1 Earnings: Stock to Disappoint?
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Axon Enterprise, Inc. will release first-quarter 2017 financial results on May 9, after the market closes.
Last quarter, the company posted a positive earnings surprise of 9.09%. In the trailing four quarters, the company has recorded an average positive surprise of 70.61%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Axon Enterprise’s body-worn video cameras are in demand with the company winning orders from domestic and international police departments during the first quarter. These hot-selling body cameras also come with a cloud storage service, EVIDENCE.com, which allows hassle-free storage.
During the quarter, the company bagged a number of orders from various police departments for its smart weapons as well. Some of its notable buyers include Australian and New Zealand Police Agencies, Georgia Department of Public Safety, U.S. Air Force, the UK's Warwickshire Police and West Mercia Police Forces, San Bernardino County Sheriff's Department, Sacramento and Pittsburgh Police.
Moreover, in the fourth-quarter earnings call, the company said that the first quarter would record 25% higher revenues year over year. But revenues are expected to be down sequentially due to seasonality around municipal budget cycles. Operating expenses are projected to grow 4%-6% sequentially, as the company continues to add customer facing roles, invest in R&D initiatives and expand into new international markets.
Axon Enterprise also said that there will a $0.9 million CFO severance costs in the first quarter, which will be reflected in the company’s financials.
Again, according to the FBI's National Instant Criminal Background Check System ("NICS"), first-quarter 2017’s firearm background checks dropped 12.6 % from the year-ago quarter’s equivalent figure. The drop indicates a decline in demand for firearms in the soon-to-be reported quarter. This could hurt sales growth for publicly traded gun manufacturers like Axon Enterprise.
Meanwhile, the company continues to invest in research and development (R&D) to maintain its expertise in emerging technologies such as wearables, mobile and cloud. Axon Body 2 is part of the growing Axon platform that connects cloud, mobile and wearable technologies. The deployment of body cameras is aimed to render police agencies a distinct transparency.
In the first quarter, the Zacks Consensus Estimate for earnings reflects a 56.7% year-over-year decline, while sales are anticipated to improve 25% to $69.42 million.
Earnings Whispers
Our proven model does not show that Axon Enterprise is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: Axon Enterprise has an Earnings ESP of 0.00%. This is because the Most Accurate estimate of 3 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Axon Enterprise carries a Zacks Rank #4 (Sell).
Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
MSA Safety Incorporated (MSA - Free Report) , another Zacks Rank #2, has beaten its quarter earnings estimates by 16%.
Fortune Brands Home & Security, Inc. currently carries a Zacks Rank #3. It exceeded quarterly earnings projections by 15.22%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Axon Enterprise (AAXN) Q1 Earnings: Stock to Disappoint?
Axon Enterprise, Inc. will release first-quarter 2017 financial results on May 9, after the market closes.
Last quarter, the company posted a positive earnings surprise of 9.09%. In the trailing four quarters, the company has recorded an average positive surprise of 70.61%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Axon Enterprise’s body-worn video cameras are in demand with the company winning orders from domestic and international police departments during the first quarter. These hot-selling body cameras also come with a cloud storage service, EVIDENCE.com, which allows hassle-free storage.
During the quarter, the company bagged a number of orders from various police departments for its smart weapons as well. Some of its notable buyers include Australian and New Zealand Police Agencies, Georgia Department of Public Safety, U.S. Air Force, the UK's Warwickshire Police and West Mercia Police Forces, San Bernardino County Sheriff's Department, Sacramento and Pittsburgh Police.
Moreover, in the fourth-quarter earnings call, the company said that the first quarter would record 25% higher revenues year over year. But revenues are expected to be down sequentially due to seasonality around municipal budget cycles. Operating expenses are projected to grow 4%-6% sequentially, as the company continues to add customer facing roles, invest in R&D initiatives and expand into new international markets.
Axon Enterprise also said that there will a $0.9 million CFO severance costs in the first quarter, which will be reflected in the company’s financials.
Again, according to the FBI's National Instant Criminal Background Check System ("NICS"), first-quarter 2017’s firearm background checks dropped 12.6 % from the year-ago quarter’s equivalent figure. The drop indicates a decline in demand for firearms in the soon-to-be reported quarter. This could hurt sales growth for publicly traded gun manufacturers like Axon Enterprise.
Meanwhile, the company continues to invest in research and development (R&D) to maintain its expertise in emerging technologies such as wearables, mobile and cloud. Axon Body 2 is part of the growing Axon platform that connects cloud, mobile and wearable technologies. The deployment of body cameras is aimed to render police agencies a distinct transparency.
In the first quarter, the Zacks Consensus Estimate for earnings reflects a 56.7% year-over-year decline, while sales are anticipated to improve 25% to $69.42 million.
Earnings Whispers
Our proven model does not show that Axon Enterprise is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: Axon Enterprise has an Earnings ESP of 0.00%. This is because the Most Accurate estimate of 3 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Axon Enterprise carries a Zacks Rank #4 (Sell).
Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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Positive Surprises by Peers
Here are some stocks in the protection and safety industry that have surpassed expectations this earnings season:
Allegion plc (ALLE - Free Report) currently carries a Zacks Rank #2. The company topped quarterly earnings estimates by 5.80%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
MSA Safety Incorporated (MSA - Free Report) , another Zacks Rank #2, has beaten its quarter earnings estimates by 16%.
Fortune Brands Home & Security, Inc. currently carries a Zacks Rank #3. It exceeded quarterly earnings projections by 15.22%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>