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Should Axon Enterprise Stock be in Your Portfolio Pre-Q3 Earnings?
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Key Takeaways
AXON's Q3 earnings are expected to jump 62.4%, with revenues projected to rise 31% to $931.1 million.
Strong TASER 10 demand, software adoption and counter-drone solutions are expected to fuel Axon's Q3 growth.
AXON's 41.89X forward P/E, rising costs and negative Earnings ESP warrant caution ahead of Q3 results.
Axon Enterprise, Inc. (AXON - Free Report) is scheduled to release third-quarter 2026 results on Nov. 5, after market close. The Zacks Consensus Estimate for earnings is currently pegged at $1.90 per share on revenues of $931.1 million.
The company’s third-quarter earnings estimates have decreased 2.1% over the past 60 days. The bottom-line projection indicates an increase of 62.4% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 31%.
Image Source: Zacks Investment Research
Earnings Surprise History
Axon Enterprise’s earnings outpaced the Zacks Consensus Estimate once and missed thrice in the trailing four quarters, the average surprise being a negative 0.8%. In the last reported quarter, it delivered an earnings surprise of a negative 0.5%.
Earnings Whispers for AXON
Our proven model does not conclusively predict an earnings beat for the company 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, but that’s not the case here.
What’s Likely to Shape Axon Enterprise’s Q3 Results?
Axon Enterprise’s Connected Devices segment’s third-quarter performance is expected to have benefited from solid demand for TASER 10 products and higher cartridge revenues. Continued adoption of the company’s next-generation body-worn camera, Axon Body 4, is expected to have driven the segment’s performance. Increasing demand across U.S. state and local customers, along with growing international bookings, is likely to have been favorable.
Axon Enterprise’s strong presence in the counter-drone space is likely to have contributed significantly to the segment’s growth. The Zacks Consensus Estimate for the Connected Devices segment’s revenues is pegged at $521 million, indicating a 28.6% increase year over year.
The addition of new users and increased adoption of premium software is expected to have supported the Software & Services segment. Continued momentum in the Axon Evidence platform, AI Era Plan, productivity solutions, counter-drone software and Axon 911 is likely to have augmented the segmental top line. The Zacks Consensus Estimate for the Software & Services segment’s net sales is pegged at $417 million, indicating a 36.7% increase year over year.
AXON remains focused on acquisitions and strategic collaborations to expand its product offerings and customer base. In February 2026, the company acquired Carbyne, a well-known provider of cloud contact center technology solutions to public safety agencies. The acquisition integrated Carbyne’s advanced cloud-native 911 technology into the Axon ecosystem to create Axon 911, a state-of-the-art, fully integrated solution that will connect callers and responders instantly. The buyouts are expected to have boosted its top line in the quarter.
Despite the positives, rising operating costs and expenses have been a concern for the company. High costs related to business integration activities, increased research and development expenses, and stock-based compensation are expected to have weighed on AXON’s bottom line in the to-be-reported quarter.
AXON’s Price Performance
AXON shares have gained 9.4% in the past six months against the Zacks Aerospace - Defense Equipment industry’s 9.7% decline. The company’s shares have also fared comparatively better than the S&P 500’s increase of 2%. With respect to its major peers, Teledyne Technologies Incorporated (TDY - Free Report) and Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) have gained 5% and declined 30.9%, respectively, in the same period.
Six-Month Price Performance
Image Source: Zacks Investment Research
Axon Enterprise’s Valuation Remains an Overhang
AXON’s lofty valuation remains a concern. The stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 41.89X, much higher than the industry average of 32.34X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
In comparison with AXON’s valuation, its peers, Teledyne Technologies and Kratos Defense & Security, are trading cheaper. Notably, Teledyne Technologies and Kratos Defense & Security are trading at 24.36X and 37.12X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
With a comprehensive and diversified product portfolio, Axon Enterprise has been capitalizing on the growing opportunities in the safety, drones and counter-drone markets. The company’s strategic collaborations, investments in AI products and strength in the TASER 10 device market bode well ahead of its third-quarter earnings.
An increase in the aggregate number of users to the Axon network, along with benefits from acquired assets, is likely to drive the company’s performance in the quarters ahead. However, higher operating costs, integration expenses and stock-based compensation may continue to weigh on margins in the near term.
Should You Buy AXON Now or Wait?
Strong demand for TASER devices, along with growth in the counter-drone market and strategic acquisitions, positions AXON favorably for solid third-quarter results. However, AXON's premium valuation and high costs warrant a cautious approach for existing investors. Potential investors should consider waiting for the company's earnings report and a more attractive entry point before investing in the stock.
View the Zacks #1 Rank List
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Should Axon Enterprise Stock be in Your Portfolio Pre-Q3 Earnings?
Key Takeaways
Axon Enterprise, Inc. (AXON - Free Report) is scheduled to release third-quarter 2026 results on Nov. 5, after market close. The Zacks Consensus Estimate for earnings is currently pegged at $1.90 per share on revenues of $931.1 million.
The company’s third-quarter earnings estimates have decreased 2.1% over the past 60 days. The bottom-line projection indicates an increase of 62.4% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 31%.
Image Source: Zacks Investment Research
Earnings Surprise History
Axon Enterprise’s earnings outpaced the Zacks Consensus Estimate once and missed thrice in the trailing four quarters, the average surprise being a negative 0.8%. In the last reported quarter, it delivered an earnings surprise of a negative 0.5%.
Earnings Whispers for AXON
Our proven model does not conclusively predict an earnings beat for the company 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, but that’s not the case here.
AXON has an Earnings ESP of -18.55% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Axon Enterprise, Inc Price and EPS Surprise
Axon Enterprise, Inc price-eps-surprise | Axon Enterprise, Inc Quote
What’s Likely to Shape Axon Enterprise’s Q3 Results?
Axon Enterprise’s Connected Devices segment’s third-quarter performance is expected to have benefited from solid demand for TASER 10 products and higher cartridge revenues. Continued adoption of the company’s next-generation body-worn camera, Axon Body 4, is expected to have driven the segment’s performance. Increasing demand across U.S. state and local customers, along with growing international bookings, is likely to have been favorable.
Axon Enterprise’s strong presence in the counter-drone space is likely to have contributed significantly to the segment’s growth. The Zacks Consensus Estimate for the Connected Devices segment’s revenues is pegged at $521 million, indicating a 28.6% increase year over year.
The addition of new users and increased adoption of premium software is expected to have supported the Software & Services segment. Continued momentum in the Axon Evidence platform, AI Era Plan, productivity solutions, counter-drone software and Axon 911 is likely to have augmented the segmental top line. The Zacks Consensus Estimate for the Software & Services segment’s net sales is pegged at $417 million, indicating a 36.7% increase year over year.
AXON remains focused on acquisitions and strategic collaborations to expand its product offerings and customer base. In February 2026, the company acquired Carbyne, a well-known provider of cloud contact center technology solutions to public safety agencies. The acquisition integrated Carbyne’s advanced cloud-native 911 technology into the Axon ecosystem to create Axon 911, a state-of-the-art, fully integrated solution that will connect callers and responders instantly. The buyouts are expected to have boosted its top line in the quarter.
Despite the positives, rising operating costs and expenses have been a concern for the company. High costs related to business integration activities, increased research and development expenses, and stock-based compensation are expected to have weighed on AXON’s bottom line in the to-be-reported quarter.
AXON’s Price Performance
AXON shares have gained 9.4% in the past six months against the Zacks Aerospace - Defense Equipment industry’s 9.7% decline. The company’s shares have also fared comparatively better than the S&P 500’s increase of 2%. With respect to its major peers, Teledyne Technologies Incorporated (TDY - Free Report) and Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) have gained 5% and declined 30.9%, respectively, in the same period.
Six-Month Price Performance
Image Source: Zacks Investment Research
Axon Enterprise’s Valuation Remains an Overhang
AXON’s lofty valuation remains a concern. The stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 41.89X, much higher than the industry average of 32.34X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
In comparison with AXON’s valuation, its peers, Teledyne Technologies and Kratos Defense & Security, are trading cheaper. Notably, Teledyne Technologies and Kratos Defense & Security are trading at 24.36X and 37.12X, respectively.
Price-to-Earnings (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Thesis
With a comprehensive and diversified product portfolio, Axon Enterprise has been capitalizing on the growing opportunities in the safety, drones and counter-drone markets. The company’s strategic collaborations, investments in AI products and strength in the TASER 10 device market bode well ahead of its third-quarter earnings.
An increase in the aggregate number of users to the Axon network, along with benefits from acquired assets, is likely to drive the company’s performance in the quarters ahead. However, higher operating costs, integration expenses and stock-based compensation may continue to weigh on margins in the near term.
Should You Buy AXON Now or Wait?
Strong demand for TASER devices, along with growth in the counter-drone market and strategic acquisitions, positions AXON favorably for solid third-quarter results. However, AXON's premium valuation and high costs warrant a cautious approach for existing investors. Potential investors should consider waiting for the company's earnings report and a more attractive entry point before investing in the stock.