North America
Axon’s Long-Term Outlook Despite Federal Budget Worries
• Axon’s long-term outlook is strong despite federal budget concerns.
• The company’s stock price is currently trading at a price of -0.57%.
• The company’s stock is a significant part of the market, with a market capitalization of -$2.17 trillion.
• The company’s stock is a significant part of the NASDAQ:AX index.
• The company’s stock is a significant part of the broader market, with a market capitalization of -$2.17 trillion.
Axon’s Federal Impact and Earnings Impressions
• Axon’s revenue comes from the federal government, with 84% coming from the US and 4 out of the 10 largest domestic booking companies in Q3 coming from federal agencies.
• The Pentagon is working to reallocate 8% of its total budget over the next five years to higher-priority programs, potentially resulting in around $300 billion in spending shifts.
• The House of Representatives recently passed a budget bill including a $300 billion increase for national defense and border spending in fiscal 2025.
• The company’s partnership with governments in technology and advanced hardware aligns with its role in cutting bureaucracy.
• Axon raised its estimated Total Addressable Market (TAM) by 68% to $129 billion, with federal U.S. government spending accounting for less than 10%.
• Axon’s earnings were impressive, with $2.08 adjusted earnings per share, an 81% increase from the previous year, and revenue growth of 33%.
• The company secured its biggest enterprise deal ever, with enterprise bookings tripled compared to last year.
• Axon’s future contracted bookings of $10.1 billion are nearly five times higher than the revenue generated in 2024.
• The company is trading at a forward-adjusted price-to-earnings (P/E) multiple of 100x, but it’s still less than 2% penetrated into its TAM.
• Two Wall Street analysts still see significant near-term upside, with an implied upside of nearly 26% based on its 3 p.m. EST price on Feb. 26.
• Axon still has a strong opportunity to keep appreciating long-term, although its valuation may lead to near-term volatility.
