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Is Axon Enterprise (AAXN) Poised to Beat Earnings in Q3?

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Axon Enterprise, Inc. (AAXN - Free Report) will release third-quarter 2018 results on Nov 6, after market closes.

In the last reported quarter, the company delivered a positive earnings surprise of 100%. In the trailing four quarters, the company beat estimates thrice with average positive surprise of 355%.

Let’s see how things are shaping up for this announcement.

Why a Likely Positive Earnings Surprise

Our proven model does show that Axon Enterprise is likely to beat earnings in the third quarter. This is because the stock has the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.

Earnings ESP: Axon Enterprise has an Earnings ESP of +33.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3, which increases the possibility of an earnings beat along with a positive ESP.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Axon Enterprise, Inc Price and EPS Surprise

 

Axon Enterprise, Inc Price and EPS Surprise | Axon Enterprise, Inc Quote

Factors Under Consideration

During the third quarter, Australia's Tasmania Police joined the Axon Network by placing an order of 750 Axon Body Cameras. The Honolulu Police Department placed orders for 1,200 Axon Body Cameras. Likewise, the Boston Police Department also joined Axon's network for its Body-Worn Camera Program.

Such strong order growth is likely to have a favorable impact on Axon Enterprise’s upcoming quarterly results and aid top-line growth. In line with this, the Zacks Consensus Estimate for third-quarter revenues is pegged at $103 million, reflecting 39.2% year-over-year surge.

Interestingly, similar to the second quarter, Axon Enterprise expects an increase in operational expenses in the third quarter, driven by investments made in its new TASER 7 smart weapons along with operating expenses and additional costs related to VIEVU acquisition.

However, the solid revenue growth can be expected to outweigh these operating expenses and in turn boost the company’s bottom line. Evidently, the Zacks Consensus Estimate for third-quarter earnings is pegged at 12 cents, reflecting a massive improvement from the year-ago quarter’s bottom line of a penny.

Other Stocks That Warrant a Look

Here are a few stocks in the Zacks Industrial Products sector worth considering on the basis of our model, which shows that these have the right combination to pull off a beat.

Plug Power, Inc. (PLUG - Free Report) is slated to report third-quarter 2018 results on Nov 14. The company has an Earnings ESP of +7.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Emerson Electric (EMR - Free Report) is slated to report fourth-quarter fiscal 2018 results on Nov 6. The company has an Earnings ESP of +2.00% and a Zacks Rank #3.

Recent Sector Release

Ingersoll-Rand plc (IR - Free Report) third-quarterly adjusted earnings came in at $1.75 per share, up 22% year over year. The bottom line also outpaced the Zacks Consensus Estimate of $1.72.

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