Contemplate Investing in AXON Stock for $560?
Take a Stroll through Axon Enterprise's Streaky Stock Market Journey
Get ready to dive into the ups and downs of Axon Enterprise's stock market ride, best known for their taser and body cams! This tech-forward law enforcement gear supplier has faced an uncertain ride, with its stock falling by over 15% within a month, then shaken by broader market weakness. The S&P500 index took a hit too, dropping a whopping 8% after the Trump administration's confirmation of tariffs on trading partners like Mexico, Canada, and China. For a deeper look into the impact of tariffs on specific stocks, check out our article titled Trump's Tariff Policy: The Tariff Effect on Alcoa and Metal Stocks [sidenote:Trump's Tariff Policy].
After the recent decline, the question many investors are asking is whether Axon Enterprise's stock remains an appealing but volatile choice at a current price of approximately $560. In our analysis, we've found minimal concerns surrounding Axon Enterprise stock due to its exceptional operating performance and robust financial condition across recent years. Our examination of Axon Enterprise based on key factors of Growth, Profitability, Financial Stability, and Downturn Resilience showcases a strong operating performance and financial health for the company.
Valuation Showdown: Compare Axon Enterprise to the S&P 500
When considering the price you pay for each dollar of sales or profit, Axon Enterprise stock shows up as expensive compared to the broader market.
• Axon Enterprise offers a price-to-sales (P/S) ratio of 20.6, in contrast to a figure of just 3.2 for the S&P 500.• The company's price-to-operating income (P/EBIT) ratio clocks in at 351.1, compared to 24.3 for the S&P 500.• Lastly, the price-to-earnings (P/E) ratio stands at 134.2 compared to the benchmark's 24.3.
Revenues Sales on the Rise for Axon Enterprise
Axon Enterprise has witnessed a significant expansion in their top line in recent years.
• In the past three years, Axon Enterprise's revenues have grown at an average rate of 30.7%, exceeding the growth of 6.3% observed in the S&P 500.• According to the latest 12-month figures, the company's revenues have surged 32.4% from $1.5 Billion to $1.9 Billion, contrasting with the growth of 5.2% for the S&P 500.• In the last quarter, the company's quarterly revenues grew by 31.7% from $413 Million to $544 Million, edging out the 5.0% improvement observed for the S&P 500.
Measuring Axon Enterprise's Profitability
Axon Enterprise experiences lower profit margins relative to most companies within the Trefis coverage universe.
• Over the last four quarters, Axon Enterprise's operating income amounted to $114 Million, representing a poor operating margin of 5.9% versus the S&P 500’s more impressive 13.0%.• The company's operating cash flow (OCF) over this period amounted to $298 Million, translating to a moderate OCF-to-Sales Ratio of 15.4%, mildly trailing the S&P 500's ratio of 15.7%.
A Peek into Axon Enterprise's Financial Health
Axon Enterprise's balance sheet reflects strong finances.
• At the end of the latest quarter, Axon Enterprise carried a Debt figure of $721 Million while boasting a market capitalization of $42 Billion. This influential debt-to-equity ratio comes in at an impressively low 1.8% compared to the more substantial 19.0% found in the S&P 500.• As of the same period, Axon Enterprise's cash (including cash equivalents) totals to a formidable $1.2 Billion, yielding a powerful Cash-to-Assets Ratio of 28.9%, far eclipsing the S&P 500's 14.8%.
Axon Enterprise's Downturn Resilience: A Mixed Bag
AXON stock has demonstrated a less than ideal resilience compared to the benchmark S&P 500 index during certain economic downturns. As we hope for a gentle landing for the U.S. economy, let's examine how the stock might fare in another recession. To see how key companies, including Axon Enterprise, performed during and following the last six market crashes, check out our dashboard How Low Can Stocks Go During a Market Crash.
Inflation Shock (2022)
• AXON stock plummeted 44.8% from its high of $152.87 on 3 January 2022 to $84.37 on 11 May 2022, underperforming the S&P 500's peak-to-trough decline of 25.4%.• The stock managed to fully recover to its pre-Crisis peak by 9 November 2022 and has since risen to a high of $710.01 on 18 February 2025, now trading at around $560.
Covid Pandemic (2020)
• AXON stock dropped 40.8% from its peak of $88.90 on 19 February 2020 to $52.61 on 18 March 2020, trailing the S&P 500's peak-to-trough decline of 33.9%.• The stock completely rebounded to its pre-Crisis peak by 1 June 2020.
Global Financial Crisis (2008)
• AXON stock fell 85.8% from its high of $18.81 on 9 October 2007 to $2.68 on 20 November 2008, outperforming the S&P 500's peak-to-trough decline of 56.8%.• The stock managed to recover to its pre-Crisis peak by 20 February 2014.
Cooking up a Verdict: The Verdict on AXON Stock
To wrap things up, Axon Enterprise's key performance indicators can be summarized as follows:
• Growth: Exceptional • Profitability: Modest • Financial Stability: Excellent • Downturn Resilience: Mediocre • Overall: Solid
With its extremely high valuation, AXON appears to be an intriguing yet volatile stock, which corroborates our conclusion that the stock is a tricky pick.
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- Despite the recent decline, Axon Enterprise's stock remains an appealing but volatile choice, as it has shown exceptionally strong operating performance and financial health over recent years.
- However, when comparing Axon Enterprise's valuation to the broader market, the stock appears expensive, with higher price-to-sales, price-to-operating income, and price-to-earnings ratios than the S&P 500.
- The impact of tariffs on specific stocks, such as Axon Enterprise, is a topic worth exploring, as broader market weakness and tariffs have shaken the stock market, including Axon Enterprise, in the past.
