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Axon's Connected Devices Unit Gains Momentum: Can It Sustain?
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Key Takeaways
Axon's Connected Devices unit gains from strong TASER 10 and Axon Body 4 demand despite softer TASER 7 sales.
Platform Solutions revenues surged 105.6%, driven by counter-drone, virtual reality and fleet products.
AXON cuts its 2026 revenue outlook to $3.61-$3.63 billion due to delays in three federal Dedrone projects.
Axon Enterprise, Inc. (AXON - Free Report) is benefiting from strong momentum in its Connected Devices segment. The company continues to witness solid demand for its next-generation TASER products and Axon Body 4 camera, augmenting the segment’s growth in the third quarter of 2026. However, the growth was partially offset by reduced TASER 7 sales and the delayed recognition of approximately $30 million from a federal Dedrone deployment.
Management highlighted continued TASER 10 demand and the recent introduction of TASER Ion. The company also recently unveiled Axon Body 5, with commercial availability expected in spring 2027, creating another potential hardware upgrade cycle.
In the third quarter, revenues from the company’s TASER product line decreased 2% year over year, while those from the Personal Sensors increased 6.4%, led by Axon Body 4. Also, revenues from the Platform Solutions product line soared 105.6%, supported by counter-drone, virtual reality and fleet.
Growing instances of terrorism and criminal activities, with concerns related to the ever-increasing fraudulent activities, will augur well for Axon’s products in the quarters ahead. The company lowered its 2026 revenue outlook to $3.61-$3.63 billion, representing approximately 30% annual growth, from its previous expectation of 32-34% growth. The downward revision stems from delays in three federal Dedrone projects worth approximately $130 million, prompting their removal from the 2026 revenue forecast.
Segment Snapshot of AXON's Peers
Woodward, Inc.’s (WWD - Free Report) Industrial business segment reported net sales of $401 million in the third quarter of fiscal 2026, up 26% year over year. Woodward generated 36.1% of its total sales from this segment in the quarter. The increase in revenues for Woodward’s segment is primarily attributable to strength across power generation, transportation and oil & gas markets.
Kratos Defense & Security Solutions, Inc.’s (KTOS - Free Report) Government Solutions segment’s third-quarter 2026 revenues increased 52.5% year over year to $397.2 million. The segmental revenues were driven by strength in Kratos Defense’s Turbine Technologies, Defense Rocket Systems, Training and Cyber and Microwave Products businesses. Kratos Defense derived 84.2% of its total revenues from this segment during the quarter.
AXON’s Price Performance, Valuation and Estimates
Image Source: Zacks Investment Research
Shares of Axon have lost 20.7% in the past six months compared with the industry’s decline of 18.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 31.37X, above the industry’s average of 31.08X. Axon carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AXON’s 2026 and 2027 earnings has declined over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Axon's Connected Devices Unit Gains Momentum: Can It Sustain?
Key Takeaways
Axon Enterprise, Inc. (AXON - Free Report) is benefiting from strong momentum in its Connected Devices segment. The company continues to witness solid demand for its next-generation TASER products and Axon Body 4 camera, augmenting the segment’s growth in the third quarter of 2026. However, the growth was partially offset by reduced TASER 7 sales and the delayed recognition of approximately $30 million from a federal Dedrone deployment.
Management highlighted continued TASER 10 demand and the recent introduction of TASER Ion. The company also recently unveiled Axon Body 5, with commercial availability expected in spring 2027, creating another potential hardware upgrade cycle.
In the third quarter, revenues from the company’s TASER product line decreased 2% year over year, while those from the Personal Sensors increased 6.4%, led by Axon Body 4. Also, revenues from the Platform Solutions product line soared 105.6%, supported by counter-drone, virtual reality and fleet.
Growing instances of terrorism and criminal activities, with concerns related to the ever-increasing fraudulent activities, will augur well for Axon’s products in the quarters ahead. The company lowered its 2026 revenue outlook to $3.61-$3.63 billion, representing approximately 30% annual growth, from its previous expectation of 32-34% growth. The downward revision stems from delays in three federal Dedrone projects worth approximately $130 million, prompting their removal from the 2026 revenue forecast.
Segment Snapshot of AXON's Peers
Woodward, Inc.’s (WWD - Free Report) Industrial business segment reported net sales of $401 million in the third quarter of fiscal 2026, up 26% year over year. Woodward generated 36.1% of its total sales from this segment in the quarter. The increase in revenues for Woodward’s segment is primarily attributable to strength across power generation, transportation and oil & gas markets.
Kratos Defense & Security Solutions, Inc.’s (KTOS - Free Report) Government Solutions segment’s third-quarter 2026 revenues increased 52.5% year over year to $397.2 million. The segmental revenues were driven by strength in Kratos Defense’s Turbine Technologies, Defense Rocket Systems, Training and Cyber and Microwave Products businesses. Kratos Defense derived 84.2% of its total revenues from this segment during the quarter.
AXON’s Price Performance, Valuation and Estimates
Image Source: Zacks Investment Research
Shares of Axon have lost 20.7% in the past six months compared with the industry’s decline of 18.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 31.37X, above the industry’s average of 31.08X. Axon carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AXON’s 2026 and 2027 earnings has declined over the past 60 days.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.