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Is a Beat in Store for Axon Enterprise's (AAXN) Q2 Earnings?

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Axon Enterprise, Inc. is scheduled to report second-quarter 2019 results after the closing bell on Aug 8.

The company delivered better-than-expected earnings in three of the trailing four quarters, recording a positive earnings surprise of 65.97%.

The Zacks Consensus Estimate for the second-quarter total revenues is pegged at $115 million, projecting year-over-year growth of 16.2%. The Zacks Consensus Estimate for earnings is pinned at 16 cents for the quarter, down 11.1% from the 18 cents per share reported in the prior-year quarter.


Let us see how things are shaping up for the company prior to this announcement.

Axon Enterprise, Inc Price and EPS Surprise

Earnings Whisper

Our proven model shows that Axon Enterprise is likely to beat estimates in the second quarter. This is because the stock needs to have the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:

Earnings ESP: Axon Enterprise has an Earnings ESP of +10.21%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 18 cents and 16 cents, respectively. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
 
Zacks Rank: The company currently sports a Zacks Rank #1, which when combined with a positive ESP, makes us reasonably confident of an earnings beat.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Factors to Consider

The company continues to expand product offerings and roll out multiple software/service solutions. Axon Enterprise will benefit from its expanded product offerings and strong execution in the second quarter.

The company’s TASER Weapons segment will gain from the increased sales of products, and improved sales under the Officer Safety Plan and TASER 60 purchase programs. Last October, Axon Enterprise introduced TASER 7, its most effective TASER weapon with improved performance across all key metrics. It started shipping in the fourth quarter of 2018. The company’s gross margin is anticipated to expand on improved return from TASER 7 and natural business trends

Moreover, the company had earlier guided revenues of $485-$495 million for the current year, driven by new cloud-connected products, which include TASER 7 and Axon Body 3 shipment. Revenues for second-quarter 2019 will likely be up 16-17% year over year.
 
Customer demand for products and software remains robust. The Software and Sensors segment will gain as the company continues to add users to its network, resulting in steady product revenues. It will also benefit from increased aggregate users which resulted in improved Evidence.com and extended warranty revenues. The segment is also likely to register bookings growth in the quarter under review.

Price Performance

Over the past year, the company’s shares have gained 3.3%, outperforming the industry’s growth of 0.7%.



Stocks Worth a Look

Here are some stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Cisco Systems, Inc. (CSCO - Free Report) has an Earnings ESP of +1.53% and carries a Zacks Rank #2, currently.

Acer Therapeutics Inc. (ACER - Free Report) has an Earnings ESP of +10.10% and carries a Zacks Rank of 3, at present.

Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +1.50% and currently carries a Zacks Rank #3.

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